Manufacturing industry to continue to drive Czech economy, CZK likely to gain in mid to long-term

The Czech economic growth continues to be mainly driven by the manufacturing industry, although most sectors of the economy are indicating a positive trend. On the demand side, rise in consumption is underpinned by the rising wages and upbeat consumer expectations. Currently, any fundamental economic changes or reforms are not likely. The progress of Czech’s preparations for joining the euro area is not likely in this electoral term, stated KBC Market Research in a research report.

Meanwhile, the Czech koruna is expected to gain in the mid to long-term following the end of the interventions seeing it in one year horizon about 5 percent stronger. However, in the short-run, which can last up till several months, the koruna might be volatile in both the directions added KBC Market Research.