Czechs Surprise With Bigger Rate Hike as Inflation Risks Mount
Bloomberg
Published May 05, 2022 08:30AM ET
Updated May 05, 2022 08:54AM ET
Czechs Surprise With Bigger Rate Hike as Inflation Risks Mount
(Bloomberg) -- Czech policy makers lifted borrowing costs more than expected as mounting price pressures are eclipsing risks to economic growth posed by the war in Ukraine.
The central bank on Thursday raised the benchmark rate by 75 basis points to 5.75%, exceeding the forecast of all analysts in a Bloomberg survey for a half-point rate hike. The increase brings the cumulative increases to 550 basis points since last June.
Governor Jiri Rusnok will comment on the decision, and present the fresh quarterly forecast at a news conference scheduled for 3:45 p.m. in Prague.
The Czechs are experiencing the fastest inflation in nearly a quarter century as Russia’s invasion of Ukraine has driven up prices for energy and raw materials. While the key manufacturing industry is grappling with input shortages and the economy may stall this year as a result, central bankers have been concerned about signs that high consumer prices are becoming entrenched.
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Written By: Bloomberg
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