Economy starting to recover After last year’s contraction of 0.2%, we expect GDP growth of 1.4% this year and an acceleration to 2.2% next year. The recovery should be driven by renewed growth in domestic demand, both consumption and investment. Continued increases in real wages should help boost household spending. In contrast, industrial activity will remain weak this year.

Inflation to remain close to central bank’s 2% target We expect headline inflation to reach 2.1% this year and fall to 1.8% next year. While food prices should decline this year, core and regulated price growth are likely to remain above 2%. In 2025, monetary tightening will be fully reflected in core inflation and lower wholesale energy prices in regulated prices.

Economy starting to recover After last year’s contraction of 0.2%, we expect GDP growth of 1.4% this year and an acceleration to 2.2% next year. The recovery should be driven by renewed growth in domestic demand, both consumption and investment. Continued increases in real wages should help boost household spending. In contrast, industrial activity will remain weak this year.

Inflation to remain close to central bank’s 2% target We expect headline inflation to reach 2.1% this year and fall to 1.8% next year. While food prices should decline this year, core and regulated price growth are likely to remain above 2%. In 2025, monetary tightening will be fully reflected in core inflation and lower wholesale energy prices in regulated prices.

CNB to continue its gradual rate cuts The bank board attributes its ongoing cautious approach to the rapid rise in services prices and the weaker koruna. We expect a 50bp cut at each of the next three meetings. By the end of the year, we expect the repo rate to be at 3.5%, which should be the terminal rate for the current monetary cycle.

Market interest rates unlikely to fall too far Higher terminal interest rates for the ECB, the Fed and the CNB will prevent a more pronounced decline in CZK market interest rates and thus also in CZGB yields.

The koruna may appreciate slightly over the rest of the year We expect renewed appreciation vs the euro, mainly in connection with improving domestic economic fundamentals. However, global sentiment will continue to favour the US dollar.

The Annual General Meeting of Moneta Money Bank will be held today, Tuesday, April 23, 2024 at 10 a.m.

At the meeting, the shareholders approved the dividend proposal of the Board of Directors of the Bank in the amount of CZK9 per share. The record date is Monday, April 29, 2024, which means that on Thursday, April 25, Moneta shares will be traded for the last time with the right to this dividend. Payment will commence on May 21, 2024.

The approved dividend offers a dividend yield of +8.8% (gross).

On Thursday, April 25, Moneta will also release its 1Q24 results. Our estimates can be found at https://bit.ly/Moneta_e1Q24_EN. Despite several key rate cuts by the CNB, we expect funding costs to remain high. Traditionally, regulatory fees are also due in the first quarter. We also expect strong growth in fees and commissions due to strong sales of third-party products. Operating income is expected to be almost +20% higher year-on-year. However, unlike in 1Q23 when provisions were released, we estimate net provisioning in the first quarter of this year. As a result, net profit should be virtually unchanged year-on-year.

The Annual General Meeting of Moneta Money Bank will be held today, Tuesday, April 23, 2024 at 10 a.m.

At the meeting, the shareholders approved the dividend proposal of the Board of Directors of the Bank in the amount of CZK9 per share. The record date is Monday, April 29, 2024, which means that on Thursday, April 25, Moneta shares will be traded for the last time with the right to this dividend. Payment will commence on May 21, 2024.

The approved dividend offers a dividend yield of +8.8% (gross).

On Thursday, April 25, Moneta will also release its 1Q24 results. Our estimates can be found at https://bit.ly/Moneta_e1Q24_EN. Despite several key rate cuts by the CNB, we expect funding costs to remain high. Traditionally, regulatory fees are also due in the first quarter. We also expect strong growth in fees and commissions due to strong sales of third-party products. Operating income is expected to be almost +20% higher year-on-year. However, unlike in 1Q23 when provisions were released, we estimate net provisioning in the first quarter of this year. As a result, net profit should be virtually unchanged year-on-year.