Growth has been strong, broad-based and job rich. The economy grew at 4.4 percent last year, led by strong domestic demand. The unemployment rate fell to a record low of 2.3 percent in April 2018, even with increased participation, and real wage growth reached 6.5 percent in the first quarter of this year. Meanwhile, headline and core inflation are close to the target of 2 percent.

Economic confidence improved in June, mainly on the back of higher optimism in the business sphere, while confidence for consumers slightly declined, but remains close to its historical highs. Today’s data supports our view for a Czech National Bank hike on Wednesday.