Economists are predicting that the Czech National Bank will have to raise its interest rates, bringing to a definitive end months of falling mortgage rates. The bank’s move would be a response to improving prospects for the economy, following news that health workers will begin administering vaccinations to prevent Covid-19 by the end of the year. This, it’s hoped, will end the cycle of tightening and loosening restrictions depending on the current status of the pandemic. But the government has decided to try to help bolster the economy by promoting a series of tax reforms designed to increase spending. The parliament is expected to pass the measures before the end of the year, despite threats by the president that he would veto them. The Czech National Bank cut its base rate three times during 2020 to just 0.25 percent, which is its lowest levels since 2017. The CNB is currently predicting just mild economic recovery next year of 1.7 percent, which won’t go far to make up for the 7.2 percent drop during 2020.
