Czech c.bank revises 2012 economic growth outlook to zero

In November, the CNB reckoned with a 1.2 percent growth of gross domestic product this year and a 2.7 percent growth next year.

The central bank's revision follows the steps of the Finance Ministry which on Tuesday also revised downward its estimate of economic development this year. The ministry cut its economic growth outlook for 2012 to 0.2 percent from 1 percent expected in October.

The ministry said it did not even rule out economic recession.

In 2013, Czech economy should grow by 1.6 percent, according to its forecast.

Total inflation will exceed 3 percent temporarily this year owing to the hike in value added tax, the CNB said. But it should drop below the CNB's inflation target of 2 percent at the beginning of 2013.

In the first and second quarter of 2013, inflation should reach 1.5 percent.

Monetary-policy inflation, that is inflation adjusted for primary impacts of changes in indirect taxes, should be slightly below the 2 percent inflation target.

Author: ČTK
www.ctk.cz