What are the main causes of high inflation? Will the inflation go back to lower levels? Katarína Stehlíková asks economist Dana Hájková these questions and more in the latest episode of Talking Economics. Inflation and monetary policy have become hot topics recently. The world economy first seemed to be heading towards recession due to Covid. Now, we face huge increases in energy prices and soaring inflation. What can be done to counter developments?
“We see the causes of inflation on both, demand and supply, and the factors are both, domestic and foreign. Cost factors stem from the tight labor market in the Czech Republic, as the Czech Republic has an extremely low unemployment rate," says Dana Hájková and adds: “The last inflation number in the Czech Republic is for April when the inflation exceeded 14 %. Our target is 2%. Our last forecast estimate that inflation is culminating in this second quarter - will be 15% in June, and will decline gradually during the second half of this year and next year to 2%.”
Dana Hájková is a CERGE-EI PhD in Economics alumna and Director of Monetary Policy and Fiscal Analyses Division at Czech National Bank.