The Czech parliamentary election kicks off today, with opposition populist party ANO set to gain the most number of seats. Depending on its actual vote share, the only way it may be able to form a majority government could be through entering coalition with extreme parties on the left and right. An ANO government would likely embark on a modest fiscal loosening. This could boost GDP growth but, with spare capacity in the economy limited, there's a good chance that it fuels inflation and adds to the reasons why the next move in rates could be a hike.
For more on the Czech election, see an in-depth report we published this week.
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