Czech Republic Economic Forecast

Czech Rep. Economic Outlook

June 7, 2022

Revised national accounts data confirmed that year-on-year growth sped up in Q1, boosted by stronger capital spending and robust private consumption amid the easing of Covid-19 restrictions. Momentum is seemingly weakening in the second quarter, however. Spiking inflation in April and plummeting consumer sentiment in April and May suggest household spending is being weighed down. That said, the PMI readings for the first two months of Q2 signaled healthy expansions in the manufacturing sector, while rising business confidence in the same period hints at solid investment activity. Meanwhile, in mid-May the government unveiled a plan to beef up gas reserves amid the Ukraine war, while it is preparing a blueprint for businesses to save on energy consumption. Moreover, the cabinet recently approved a further hike in pensions to cushion retired people from the effects of surging inflation.

Czech Republic Economic Growth

The pace of GDP growth should cool considerably this year, as the spillover effects of the war in Ukraine and rampant inflation weigh on activity. That said, the removal of Covid-19 restrictions, EU fund inflows, a tight labor market and accumulated savings should support growth. The prolongation of the Ukraine war and supply bottlenecks pose downside risks. FocusEconomics analysts see GDP expanding 2.0% in 2022, which is down 0.1 percentage points from last month’s forecast, and 2.9% in 2023.

Czech Republic Economy Data

2015 2016 2017 2018 2019
Population (million)10.510.610.610.610.6
GDP per capita (EUR)16,00816,70818,16419,55520,666
GDP (EUR bn)169176192207220
Economic Growth (GDP, annual variation in %)5.42.44.52.82.5
Consumption (annual variation in %)3.83.54.43.13.0
Investment (annual variation in %)10.3-3.24.07.52.7
Industrial Production (annual variation in %)4.33.46.53.0-0.2
Retail Sales (annual variation in %)5.75.25.54.94.8
Unemployment Rate5.14.02.92.22.0
Fiscal Balance (% of GDP)-0.60.71.50.90.3
Public Debt (% of GDP)40.036.834.732.630.8
Money (annual variation in %)8.46.68.65.67.0
Inflation Rate (CPI, annual variation in %, eop)0.02.02.42.03.2
Inflation Rate (HICP, annual variation in %, eop)-0.12.12.31.6-  
Inflation (PPI, annual variation in %)-2.9-0.30.72.42.1
Policy Interest Rate (%)0.050.050.501.752.00
Stock Market (annual variation in %)1.0-3.617.0-8.513.1
Exchange Rate (vs EUR)27.0327.0225.5425.7825.41
Exchange Rate (vs EUR, aop)27.2827.0326.3325.6525.67
Current Account (% of GDP)0.21.61.40.6-  
Current Account Balance (EUR bn)0.42.73.10.9-0.8
Trade Balance (EUR billion)6.99.19.87.89.4
Exports (EUR billion)116118130136140
Imports (EUR billion)109109120128130
Exports (annual variation in %)4.81.910.24.62.6
Imports (annual variation in %)6.30.010.36.71.6
International Reserves (EUR)59.281.3123124133
External Debt (% of GDP)68.473.489.182.778.5

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Czech Republic Facts

Value Change Date
Bond Yield1.64-1.85 %Dec 31
Exchange Rate22.76-0.66 %Dec 30

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