Page 20 - CE Outlook Regions 2022

(RRF). In 2022, the EC expects economic growth to reach 4.4%,
followed by a return to close to average growth of 3.2% in 2023.

While the EC and KB expect the Czech economy to reach its
pre-pandemic output level in 3Q22, the CNB forecast is more
pessimistic and sees the Czech GDP returning to the pre-pandemic
level not sooner than at the end of 2022.

According to KB, the expected end of supply chain problems should
lead to accelerated economic growth from mid-2022, when GDP
should reach its peak in terms of quarter-on-quarter dynamics. Thus,
in this scenario, the Czech economy is projected to grow at an
above-average rate of 4.0% in 2023.

OECD´s forecast is the most pessimistic of all the outlooks. In
OECD economic figures, Czech GDP is projected to increase by
only 3% in 2022 and follow with a 3.9% growth in 2023. As a result
of a bottleneck in international supply chains, the growth of
manufacturing and exports in Czechia stalled in 2021 and will face
headwinds until mid-2022. Household consumption will be
accelerated by spending from household savings, which would
result in growth of imports.

Growth in household consumption is expected by the CNB to
exceed 6% in 2022 amid renewed overheating of the labour market,
and slow roughly to its steady-state level of 3% in 2023. The
termination of numerous fiscal support measures and ongoing
problems in supply chains will have a negative effect, to be reflected
in shortages of some goods, increased uncertainty about the
impacts on the labour market and a related slight deterioration in
consumer sentiment.

Also, high growth in energy prices will have a negative impact on
consumer sentiment and demand. The supply-side constraints
should fade in 2H22, boosting consumer sentiment, which will
continue to improve.

20 CE Outlook 2022 www.intellinews.com