Macroeconomic Forecast - November 2022

ISSN 2533-5588

Introduction and Summary

Several shocks have hit the pandemic-weakened global economy this year. The war in Ukraine weighs on global economic growth and intensifies inflationary pressures, especially in the case of food and energy prices. In many countries, inflation rates in the first half of this year were the highest since the 1980s, leading central banks to gradually raise interest rates. In China, prolonged lockdowns of major economic centres continue as a result of the implementation of strict anti-epidemic restrictions, with repercussions for global demand and supply.

According to the preliminary estimate of the Czech Statistical Office, real gross domestic product of the Czech Republic, adjusted for seasonal and calendar effects, fell by 0.4% QoQ in Q3 2022 and was 1.6% higher YoY. In Q2 2022, for which detailed data on the growth structure are available, GDP grew by 3.6% YoY (unadjusted).

Household consumption was virtually flat in Q2 2022. A record fall in real disposable income, caused by accelerating inflation, had a negative impact on consumer spending, while a significant decline in the savings rate had the opposite effect. Government consumption rose by 1.5%, driven by an increase in public sector employment and purchases of goods and services.

Gross fixed capital formation increased by 8.6%, the fastest growth since the end of 2018. Investment in non-residential construction and transport equipment were the largest contributors, but all major categories showed increases. From a sectoral perspective, privately financed business investment and household investment were the key drivers.

Although the contribution of the change in inventories and valuables to GDP growth (1.7 pp) was much lower than in the second half of the previous year, it still contributed significantly to the increase in economic output. Firms probably continued to increase their inventories of production inputs to avoid losses from high inflation and component supply shortages, but stocks of work in progress may also have risen.

By contrast, the external trade balance dampened economic growth (contribution of −0.6 pp), not only because of weak exports but also due to a recovery in import-intensive investment activity and continued stock accumulation, which boosted import growth.

While the economy had grown in the first half of this year despite adverse circumstances, it is expected to go through a slight recession in the second half of the year and early next year. Nevertheless, GDP for the full year 2022 could increase by 2.4%. Growth should be driven by fixed capital investment and increased inventory accumulation. Despite a range of fiscal stimulus measures, household final consumption expenditure will be dampened by a sharp rise in the cost of living, especially energy prices, and tighter monetary policy.

GDP could be more or less stagnant in 2023. Households will continue to face the impact of high inflation next year, so their real consumption should fall slightly. Government consumption and gross fixed capital formation will continue to be pro-growth, but weaker year-on-year inventory accumulation will slow the economy noticeably. The impact of generally weak domestic demand will be partly offset by the external trade balance.

High inflation slows economic growth and lowers living standards. Annual inflation is expected to fall significantly in Q4 thanks to the energy saving package. The average inflation rate should thus reach 15.0% this year. Not only food, fuel, electricity, natural gas and imputed rent, but also other categories of goods and services are contributing significantly to the exceptionally strong consumer price inflation. Domestic demand pressures are also boosting inflation, but these should be dampened by the previous increase in monetary policy rates. Beyond the current foreign exchange interventions, this factor should also contribute to the appreciation of the koruna against the euro over the forecast horizon, which will have an anti-inflationary effect. The average inflation rate could slow to 9.5% in 2023.

Labour market imbalances related to labour shortages continue to manifest themselves. Thus, despite the expected recession and the generally weak economic dynamics in 2023, the unemployment rate should not increase much, averaging 2.5% in 2022 and rising to 3.1% in 2023. Persistent labour market tightness will push up wage growth, which will lag behind inflation, though. As a result, the average real wage is expected to fall both this year and next.

The current account of the balance of payments showed a deficit of 3.5% of GDP in Q2 2022, mainly reflecting a deterioration in the balance of goods due to high mineral fuel prices. Slowing economic growth abroad and rising input and energy prices are expected to continue contributing to the negative balance of goods this year and next. As a result, the current account deficit is expected to reach 5.4% of GDP in 2022 and narrow slightly to 5.3% of GDP in 2023.

Government sector budget performance in 2022 reflects the economic and financial consequences of the Russian aggression against Ukraine and the related humanitarian crisis, or assistance to households and firms affected by high prices. At the same time, the Czech public finances are burdened by stimulus measures of a long-term nature taken in the past two years during the pandemic. As a result, the budget deficit is likely to reach 4.6% of GDP this year and 4.3% of GDP next year. The fiscal policy stance is expected to lead to a rise in debt to 43.9% of GDP in 2022 and 46.1% of GDP next year.


Main Macroeconomic Indicators
  2017 2018 2019 2020 2021 2022 2023 2022 2023
Current forecast Previous forecast
Nominal GDP bill. CZK 5 111 5 411 5 791 5 709 6 108 6 674 7 092 6 799 7 356
  nominal growth in % 6,5 5,9 7,0 -1,4 7,0 9,3 6,3 11,3 8,2
Gross domestic product real growth in % 5,2 3,2 3,0 -5,5 3,5 2,4 -0,2 2,2 1,1
  Consumption of households real growth in % 4,0 3,5 2,7 -7,2 4,1 0,2 -0,8 0,5 0,5
  Consumption of government real growth in % 1,8 3,9 2,5 4,2 1,5 1,2 1,7 0,8 1,3
  Gross fixed capital formation real growth in % 4,9 10,0 5,9 -6,0 0,7 5,1 1,5 6,1 3,4
  Contribution of net exports pp 1,2 -1,2 0,0 -0,4 -3,6 0,0 0,8 -1,0 0,9
  Contrib. of change in inventories pp 0,5 -0,5 -0,3 -0,9 4,8 0,7 -1,4 1,3 -1,2
GDP deflator growth in % 1,3 2,6 3,9 4,3 3,3 6,7 6,5 8,9 7,0
Average inflation rate % 2,5 2,1 2,8 3,2 3,8 15,0 9,5 16,2 8,8
Employment (LFS) growth in % 1,6 1,4 0,2 -1,3 -0,4 -0,9 -0,1 -0,7 0,2
Unemployment rate (LFS) average in % 2,9 2,2 2,0 2,6 2,8 2,5 3,1 2,5 2,6
Wage bill (domestic concept) growth in % 9,2 9,6 7,8 0,1 5,8 10,0 7,4 9,8 7,9
Current account balance % of GDP 1,5 0,4 0,3 2,0 -0,8 -5,4 -5,3 -4,6 -4,0
General government balance % of GDP 1,5 0,9 0,3 -5,8 -5,1 -4,6 -4,3 -3,8 .
Exchange rate CZK/EUR   26,3 25,6 25,7 26,4 25,6 24,6 24,5 24,6 24,4
Long-term interest rates % p.a. 1,0 2,0 1,5 1,1 1,9 4,5 5,2 4,1 4,2
Crude oil Brent USD/barrel 54 71 64 42 71 102 83 105 88
GDP in the euro area real growth in % 2,8 1,8 1,6 -6,3 5,3 3,3 0,3 3,0 1,2

Tables and Graphs

Preparation of the Macroeconomic Forecasts

Updated: 25.07.2013

Evaluation of Forecasting History at the Ministry of Finance

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Updated: 9.11.2022


  • The Macroeconomic Forecast is prepared by the Economic Policy Department of the Czech Ministry of Finance. It contains a forecast for the years 2022 and 2023, and for certain indicators an outlook for the 2 following years (i.e. until 2025). It is published on a quarterly basis (in January, April, August and November).
  • Any comments or suggestions that would help us improve the quality of our publication and closer satisfy the needs of its users are welcome. Please send any comments to the following email address: macroeconomic.forecast(at)
  • Cut-off Date for Data Sources: The Macroeconomic Forecast is based on data known as of 1 November 2022.

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