Rational exuberance

In a country where it's possible to have record employment and record unemployment at the same time, as we wrote last week, it's also possible to have one institution (the ČMKOS labor union) predicting economic stagnation and another (the Czech National Bank) forecasting GDP growth of 2.2% this year and 2.8% next year. The pre-Babiš finance ministry is somewhere in between, with growth forecasts of 1.4% for this year and 2.0% for 2015, although it stresses that the intervention against the crown increased the uncertainty of predictions. In its own forecast last week, the CNB raised its growth outlook yet again, but it's impossible to know whether it was statistically sound or whether it was a PR effort to counter the criticism of the devaluation and create a self-fulling prophesy of rational exuberance on the part of consumers. CEO Pavel Kysilka of Česká spořitelna declared in HN today that the "lousy mood" in the country is over. Bankers, it seems, really want us to start spending money again.