Finance Ministry downgrades economic outlook, expects 1.9% growth this year

The Finance Ministry today downgraded its forecast for the country’s economic growth this year to 1.9% in its new economic outlook. In its previous forecast in April, it expected GDP to grow by 2.1% this year. The downgrade is due to the impact of the ongoing conflict in the Middle East. For next year, the ministry maintained its forecast of 2.4% economic growth.

The ministry expects average inflation to reach 2.2% this year, which is 0.3 percentage points lower than its April forecast. According to the ministry, slower growth in consumer prices is being driven by the transfer of renewable energy payments to the state budget, lower food prices, and a stronger Czech koruna. Next year, the ministry expects inflation to accelerate to 2.7%.