“The head of the Czech Central Bank, Aleš Michl, called on the government to balance the budget to prevent further inflation.”, — write: epravda.com.ua
The head of the Czech Central Bank, Aleš Michl, called on the government to balance the budget to prevent further inflation. This is reported by Bloomberg. Czech politicians want to maintain a hawkish monetary stance to limit borrowing by households, companies and the state, Michl said in an interview with CNN’s Prima News on Sunday. They paused interest rate cuts last month to assess new data and the economic outlook and will decide on further steps at their next meeting in February, he added. With inflation above the Czech National Bank’s target of 2%, its governor is doubling down on his preference for restrictive monetary and fiscal conditions despite economic growth. The government of Prime Minister Petr Fiala adopted one of the most aggressive austerity programs in Europe, but was unable to completely eliminate the budget deficit due to increased defense and infrastructure spending. According to Mikhl, the fiscal gap is a source of constant price pressure, along with the rising cost of services and the nascent recovery of the housing market. “The biggest inflationary risks are the deficit of the state budget and the excessive amount of money in circulation. We are not in a crisis, so we need to have a balanced budget. This is the best way to fight inflation,” Mikhlya said.