ING Forecasts Czech Inflation to Hit 1% by 2026, Prompting Cautious CNB Stance

Analysts at ING project a significant decline in Czech headline inflation, reaching approximately 1% by the summer of 2026. This downward trend is expected to be driven by a deceleration in food prices and a general easing of core inflationary pressures across the economy. Core inflation is specifically forecast to soften during the second half of 2026 as market conditions continue to stabilize. In response to these projections, the Czech National Bank (CNB) is anticipated to maintain a cautious approach to its monetary policy trajectory. The outlook suggests that lower inflation levels will guide the central bank's interest rate decisions over the coming years. Consequently, the Czech Koruna may face downward pressure as the prospect of prolonged lower rates reduces its relative appeal to international investors.