Repo rate rises to 4 percent as 2027 inflation forecast climbs

The Bank Board judged inflation risks to be tilted upward.

September inflation reached 2.5 percent as the Middle East conflict raised fuel prices.

Falling food prices restrained inflation, but poor European harvests and rising input costs will reverse that effect.

Core pressures reflect unit labor costs and imputed rent; new-property price growth slowed, while construction costs kept rising strongly.

Moving the supported energy sources fee to the state budget lowered 2026 inflation.

That effect will fade as retail energy prices rise.

Inflation will exceed 3 percent for most of 2027; ETS2 will keep it slightly above 2 percent in 2028.

Services, housing, wages, household and government lending and a potentially larger fiscal deficit remain upside risks.

For 2026, 2027 and 2028 respectively, forecast inflation is 2.1, 3.2 and 2.3 percent, revised by +0.1, +0.7 and -0.1 percentage points.

GDP growth is 1.7, 2.5 and 2.5 percent, revised by -0.5, -0.2 and -0.1 points.

Nominal wage growth is 6.2, 5.9 and 5.3 percent, revised by -1.1, +0.2 and +0.1 points.

Three-month PRIBOR is 3.9, 4.1 and 3.6 percent, revised by +0.1, +0.2 and -0.1 points.

The koruna forecast is 24.3, 24.3 and 24.2 per euro, revised by 0.0, -0.2 and -0.1. The forecast requires higher short-term rates; higher long-term yields reinforce monetary restraint.