Good day to all our regular viewers. As is customary, a few minutes ago we finished the broadcast, the live broadcast of the macroeconomic forecast for the first quarter of 2026 at the Czech Banking Association. Well, now it's time for us to look a little more closely at the topic with the panelists who presented. The first one will be Jan Vejmělek, chief economist at Komerční banka. Good day.
Hello.
It looked quite optimistic. Smiles on faces, and the numbers looked pretty good too. Is that right?
I think it is. Of course, we try to present even the worse data with a smile, because we all know, and especially we macroeconomists, that somehow positive expectations play a really important role. However, this time, I really have to say that it is great that the macroeconomic situation has stabilised and that really, after all those years from the covid, or from 2020, through the beginning of the war in Ukraine, the subsequent energy crisis, when every year the figures were really flying up and down and the uncertainty was huge, the current stability, or the current, I would say, final stabilisation has been going on for more than a year. So that's really the, that's the great news, because in this environment we have macroeconomists, but that's the least of it. In particular, it's that it's much easier for companies, for banks that finance the economy, but also for households to make decisions for the future about what, what I buy, what I spend on, what I invest in.
What is it? When I look at the headlines, it's always the global threats: China, Russia, America, Ukraine. I still see them, somehow they don't really blunt themselves. Have we got used to it, or have we learned to walk in it?
Both. Yeah, you did, that's a nice answer. It really does work that way. I remember the very first covid wave, which was I think sometime in March, April 2020, when it was really a few infected, but that was when the economy was hit the hardest because it was a shock. We had no idea what was going to happen, what the caps were going to be, right, something. Then there were other, much bigger pandemic waves coming, much more infected, but in the end the economic impact wasn't as much because we already, we just knew. And this situation, this situation is similar. Yes, we're still talking about these geopolitical uncertainties. They're there, but they've been there for, for several years. When Donald Trump walked into the oval office a year ago and we all know what followed those next three months or more. Really chaotic, not implementing, but really threatening those tariffs, and in the final, let's say, sometime since the summer, since August, those tariffs have basically stabilized. They've actually been put in place and in the final analysis, even though they're actually being paid, we know yes, it's annoying, but we'll deal with it somehow. The worst thing is when we don't know, right? So in that situation we've really maybe like gotten used to it, we've gotten some experience and, and in the final we feel more comfortable I would say.
How is it that the forecast is so optimistic when it actually creates a new threat? That is, into our peace of mind, into the fact that we think we can walk in it, suddenly we can get a total bombshell from these global threats.
So it, it can, it always can. It could before, it could, it could, it could come again. I don't think it's anything fundamentally different than what we faced, say, a year ago. Yeah, but what did it turn out to be? We didn't change the outlook for the twenty-seven in our forecast either, but we did improve the twenty-six based on the better year last year. So we're actually sort of getting there, getting there faster, and it turns out that the robustness of that global economy, American, European and Czech, yeah, in light of what's going on, it's almost like unreal. It is not that the tariffs have not had a negative effect, they have, but, on the contrary, the risks are not always negative. But, but sometimes there is something, even something positive. Certainly on the US side, we should mention the huge boom in all things related to investment in artificial intelligence. I think that has also, on the contrary, positively exceeded all the expectations we had a year ago. Well, so that, that, in turn, has worked in a positive direction. At the same time, of course, it kicked off those geopolitical changes and some other investments in the defense industry. And in the end, I think it's a bit of a combination. Investment in the defence industry, artificial intelligence, and it's multiplying a little bit.
The whole macroeconomic forecast, you can see it on the Czech Banking Association website. There's a recording of that whole live broadcast. I'm interested in one detail from that. You used quotation marks when you were presenting the employment figures, or unemployment figures, in the forecast, so you said, in quotation marks, it is doing something to us. Why?
Well, because we have been under pressure over the course of this past year, particularly in the media, about how there have been significant layoffs, how the labour market has deteriorated dramatically. Yes, that's true. Our unemployment rate has indeed risen noticeably, especially the registered unemployment rate, that is, the unemployment rate from the labour offices. There is no doubt about that. But let's add to that from the extremely low levels, when really the whole economy was complaining that there were no people, yeah. So, so we're back to somewhere, somewhere. But you've maybe inadvertently conflated employment, unemployment a little bit. Because we, when we look at employment, it hasn't gone down, so we've got unemployment up. Maybe we have some, some new, new people coming back into the labour force who haven't found a job yet, but they feel like there might be one. And unemployment has gone up, but in that labor market under the hood, I would say that the movement has been much, much cleaner and that a lot of those unemployed have very quickly found jobs in another sector of the economy, in another industry. And if I really simplify it a lot, you could see that the employment was shifting from industry, which is a sector that has not been doing well for a relatively long time and logically there were layoffs. We're increasing efficiency, productivity, towards services, well... Do, into trade and a little bit into the public sector.