Head of central bank expects inflation to drop to 2 percent next year

The Czech National Bank expects inflation to decrease to around two percent early next year, the bank's governor Aleš Michl said on CNN Prima News on Sunday. He attributed the recent reduction in inflation to the strict fiscal policy the central bank has been following and said that he expects this trend of decreasing inflation to continue.

However, he ruled out an early interest rate cut in the coming months and said that people should rather expect higher interest rates over the next five years than they have been used to in the past decade. He added that he doesn't expect money ever to be as cheap as it was back in 2016 and 2017, when interest rates were sometimes even as low as zero and a large amount of money was printed. He described this as one of the biggest economic mistakes by a central bank in history and said that he wants to make sure that Czechia never again has the highest core inflation in the EU.