The Monetary Policy Report presents a new CNB forecast four times a year. In addition to the outlook for the domestic and foreign economies, it also presents the decisions of the Bank Board in the context of considerations about the risks and uncertainties of the forecast.
Monetary Policy Reports - sample
Starting in 1998, the Czech National Bank switched to direct inflation targeting. In the inflation targeting regime, the central bank's communication with the public plays an important role. One of the basic elements of this communication is the publication of the quarterly Monetary Policy Report, which replaced the previous Inflation Report starting in 2021.
The forecast of future economic development, regularly prepared by the CNB's Monetary Section, is crucial for deciding on the current setting of interest rates. The first chapter of the Monetary Policy Report focuses on the foreign affairs, which has a significant impact on the development of the Czech economy. The second chapter contains a forecast of the domestic real economy and the labor market. The third chapter is devoted to inflation. The final chapter describes the latest monetary policy decision of the Bank Board in the context of monetary developments and risks and uncertainties of future economic development.
The forecast represents a key, but not the only, input into the Bank Board's decision-making. At its meetings during a given quarter, the Bank Board discusses the current forecast and the balance of its risks and uncertainties. The arrival of new information since the forecast was compiled, the possibility of an asymmetric assessment of the forecast risks, or different perceptions of some members of the Bank Board about the development of the external environment or the links between various indicators within the Czech economy mean that the final decision of the Bank Board may not correspond to the tone of the forecast. The records of the Bank Board's meetings provide information on the course of the Bank Board's discussion and the reasons that led it to adopt monetary policy measures.