Page 17 - CE Outlook Regions 2023

Michl also reiterated his resolve to continue “to defend the koruna
against excessive fluctuations.” The koruna had seen plunges during
2022 following the Russian invasion of Ukraine when it dropped to the
rate of CZK25.77/€1. By November local market analysts estimated the
CNB spent 16%-17.4% of its foreign currency reserves, or
€25.5bn-€28bn on interventions in favour of the koruna since May.

In December the koruna reached its 11-year high on December 20 with
the rate of CZK24.18/€1. CNB projects an average annual value of
CZK24.80/€1 in 2023.

2.1.4 Industrial production

Industrial production has been driven by the automotive sector, which
experienced a revival after the disruption of supply chains in
semiconductor chips in 2021, but in 2023 it will face challenges
stemming from the high energy prices.

Latest figures (October 2022) show industrial production increased in
real terms by 3.1% y/y and decreased by 3.7% m/m. The value of new
orders increased by 18.1% y/y, according to the data of the Czech
Statistical Office.

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