The Czech Republic’s weak economic performance in the first quarter increases the chances that interest rates will be cut rather than raised, Reuters reported, citing central bank Vice-Governor Mojmir Hampl.
“It is much harder to think about anything else in the future other than further easing,” Hampl was quoted by Reuters as saying in an interview during an economic conference in the Polish city of Katowice today. “It is definitely yet another factor heading in (the) anti-inflationary direction.”
Gross domestic product contracted 1 percent from the previous quarter, the steepest drop since the second quarter of 2009, after shrinking 0.1 percent in the final three months of last year, the Prague-based Czech Statistic Office said in a flash estimate on today. The reading was worse than the median forecast of 0.1 percent growth in a Bloomberg survey of 14 economists. GDP fell 1 percent from the same period of 2011.
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