Good day to all viewers of our regular programs. The broadcast of the Czech Banking Association’s August macroeconomic forecast is behind us, but what lies ahead are interviews with the panelists. And the first person to present today—and who will be joining us here during the broadcast—is Petr Dufek, chief economist at Creditas Bank. Good morning.

Hello.

We’re taking our viewers a little behind the scenes of our broadcast here, and I’d like to invite you further behind the scenes. Before the broadcast, you said something that amused me: that we’ll be doing so well that it won’t even feel right. Was that right?

That’s right, but it was just a joke, wasn’t it? It wasn’t strictly about the forecast, but just to lighten the mood. But of course, when I look at what’s happening in the energy markets, when I look at the geopolitical situation—with a war not far from us, the war in the Persian Gulf as yet another conflict—I’d still say we’re doing quite well. And perhaps, in some respects, surprisingly well, because few people expected Czech industry to thrive at a time when European demand is more or less languishing. At a time when Chinese manufacturers are dominating the market—for example, in the automotive industry. So I’d say the figures are still pleasantly surprising us.

Well, after all, if we look at the main summary of the macroeconomic forecast we presented, the economy—or rather, growth—remains stable. So is this a positive macroeconomic forecast?

It depends on how you look at it. It’s positive in the sense that it promises us growth—it promises us a rise in the standard of living, by the way—and it promises us that inflation will remain more or less low. So from this perspective, it certainly is. But if we were to look at a longer-term horizon and say, “We’d like to see faster growth in living standards, greater prosperity, and a stronger position for the Czech economy—perhaps within the European Union or in global trade”—then, of course, this isn’t enough, because this is merely a short-term view. It’s essentially a view of the next eighteen months.

A short-term view. So where do you, as panelists, see the biggest pitfalls?

Well, I suppose each of us sees them in a different place. But if I were to speak for myself, the number-one pitfall—the short-term one—is, in my view, investment. We saw a sudden surge at the turn of the year—actually, in the last quarter of last year— and in the first quarter of this year, when corporate investment jumped quite a bit because companies were buying new cars—which probably can’t really be considered a dramatic investment that will boost productivity or propel a company to a world-class level, but so be it. And we need to invest far more. New technologies, robotics, and, in fact, artificial intelligence, because the Czech Republic—just like the entire European Union—lags significantly behind in these areas.

Does that mean, based on what you’re saying now, that the positivity of this macroeconomic forecast stems primarily from the fact that it’s a short-term forecast—covering just those eighteen months?

Because it’s a forecast that takes a short-term view—you’re right, those 18 months—and looks, I’d say, through a rather narrow tunnel. It doesn’t really look at what’s happening to our left or to our right. For example, whether, say, in five years, Chinese automakers will dominate the entire European market. In other words, it doesn’t look further into the future. But that’s not the purpose of a forecast. The purpose of a forecast is to say what interest rates will be in a year and a half, what the standard of living will roughly be, and whether we’ll have 10 percent unemployment here.

We—or rather, you, especially as panelists—spent a lot of time during the presentation focusing on inflation: what it will actually look like, how inflation will rise, and what that means. And perhaps it would be good to briefly explain this to the viewers as well, because this is an issue we’ll likely be returning to frequently over the next eighteen months—if I’ve understood the macroeconomic forecast correctly. How are the numbers trending, what do we expect from them, and will what we expect actually turn out to be positive?

In fact, our inflation is only low on the surface. It’s only because food prices are dropping dramatically, and, by the way, we have a waiver on the renewable energy surcharge. So we’re pretending that our inflation is below two percent, and it looks good. In reality, inflation is actually at three percent already, because if we set aside these exceptional circumstances, we’re still seeing very strong pressure from the real estate market. That means rents are rising rapidly, real estate prices are rising, housing-related services are rising in general, and these effects are here to stay. Now, energy costs will be added to the mix, because it’s hard to imagine that if natural gas prices rise by 80 percent, energy companies won’t pass those costs on to their customers. We have to factor this in. And just as gas prices rise, electricity prices will automatically follow suit, because, after all, gas is the key input for the electricity market and automatically drives up the price of electricity as well. So inflation will be coming back every month, and that number—the headline figure—will no longer be as favorable as it has been so far.

We have another macroeconomic forecast coming in November. Will it still be positive?

I hope it will be positive and that some risks will be eliminated from it. First and foremost, we’ll know what next year’s national budget will look like. In other words, we’ll know how much the government will borrow and how much it will be able to push up interest rates. I think that’s quite important information. We’ll have a bit more clarity regarding regulated prices, which means we’ll be able to refine our inflation forecast for the coming year—and, in fact, for the next two years. So in that regard as well, I think things will be clearer. And let’s hope there will also be clarity regarding, for example, the European Union’s climate goals, which are truly important but also very costly for businesses and, in the future, for households in the Czech Republic as well.

Mr. Dufek, thank you for the overview of what you’ve already presented and discussed today. I’m looking forward to the fall session as well. Thank you very much.

Thank you.

Petr Dufek, chief economist at Creditas Bank. But that’s not the end yet, because we still have more interviews in store—so stay tuned for those.

Dufek: Makroekonomická prognóza ČBA 3Q26 (1. díl)