Central bank warns Czech Republic heading into recession

06-02-2009

The Czech central bank has warned that the country is heading into a recession, radically altering its forecast for the country’s economic growth to red numbers, predicting a 0.3 percent decline. It is the first time the country could slide into a recession in a decade. The bank’s governor, Zdeněk Tůma, called the prospect for this year’s growth a “negative zero”, citing falling exports as the major cause. The central bank also slashed interest rates by 0.5 percent on Thursday to a record low of 1.75 percent. The move was expected, given the low level of inflation in the Czech Republic and the grim economic outlook for 2009.