The Czech Republic’s central bank has recently cut its key interest rate for the fourth consecutive time, responding to a decrease in inflation and signs of economic recovery. On May 2, 2024, the bank lowered the interest rate by half a percentage point to 5.25%, which had been anticipated by analysts.
Inflation in the Czech Republic dropped from 15.1% in 2022 to 10.7% in 2023, according to the Czech Statistics Office. In February 2024, inflation was reported to be at 2.0%, which corresponds to the bank’s target, and remained steady at that level in March. These figures prompted the central bank to continue reducing borrowing costs.
Preliminary data released by the Czech Statistics Office on Tuesday indicated that the Czech economy had grown by 0.4% year-on-year in the first quarter of 2024 and by 0.5% compared to the previous quarter. This growth came after a contraction of 0.2% in the last three months of 2023.
As central banks across the globe assess whether inflation has been brought under control, the Czech Republic’s central bank’s decision to cut interest rates reflects a broader trend