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Year-on-year consumer price growth in Czechia slowed to 2.3 percent in January, down from 6.9 percent in December, according to figures released by the Czech Statistics Office on Thursday. While the figure is the lowest since March 2021, it is still above the Czech National Bank’s two-percent inflation target.

According to experts, the slowdown in year-on-year inflation was mainly due to housing-related prices. Electricity prices in particular dropped to 13.3 per cent in January, having previously risen by 142.4 percent in December.

The European Commission has downgraded its Czech growth forecast for 2024, predicting that GDP will grow by 1.1 percent instead of the previously expected 1.4 percent.

According to the EC prediction, growth should be supported by the high saving rate of households over the past three years, the projected easing of inflation and rising real wages, as well as by further relaxation of financing conditions.

It also points out that recent consumer and business confidence indicators are still below the historical average, indicating an only gradual return to a higher growth rate in private demand.

The Prague Municipal Court has once again acquitted ANO party leader and former prime minister Andrej Babiš of fraud charges in a case involving a CZK 50 million subsidy for a congress centre near Prague. It was the court’s second ruling on the case after an appeals court overturned a not-guilty verdict in January of 2023. Babiš’ assistant Jana Nagyova was also acquitted.

Andrej Babiš was suspected of having wrongfully acquired a 50 million crown EU grant for the center  intended for small and medium sized businesses by temporarily transferring ownership to his wife and children. The center was part of the prime minister’s multi-billion crown conglomerate Agrofert and was later brought back to the fold.

The Czech government has moved to place sweets containing the psychoactive substance HHC on the list of banned addictive substances. According to Agriculture Minister Marek Výborný the measure is temporary and will have to be approved by the European Commission which may take between two to three weeks. It should be enforced in March.  Since last summer, around 170 children and young people have ended up in hospital after overdosing on these products. The European Union is expected to address the problem on a European scale.

At its session on Wednesday the cabinet also discussed Czechia’s progress in meeting the Maastricht  criteria, but it did not set a target date for euro adoption.