Czech Republic GDP

Czech Republic

Economic growth accelerates at fastest pace in three years

In the first quarter, GDP increased a seasonally- and calendar-adjusted 2.5% over the same quarter last year, according to more complete data released by the Czech Statistics Office (CZO) on 4 June. The reading was revised up from the 2.0% increase published in the flash estimate and marked an acceleration over the 1.1% expansion registered in the fourth quarter. The reading marked the fastest pace of economic growth in three years.

Q1’s strong improvement was broad-based. Growth in domestic demand picked up in the first quarter, reflecting faster growth in total consumption (Q1: +1.4% year-on-year; Q4: +1.2% yoy), which in turn was buttressed by an improvement in private consumption (Q1: +1.5% yoy; Q4: +1.2% yoy). Conversely, government spending decelerated from a 2.1% expansion in Q4 to a 1.4% increase in Q1. Meanwhile, gross fixed investment jumped 5.2% in Q1, well above the 2.7% expansion tallied in Q4.

On the external side of the economy, exports of goods and services soared 9.8% in Q1, which was a notable improvement over the 3.7% increase registered in Q4. Imports grew a robust 9.2% in the first quarter, which came in well above the 3.5% expansion tallied in the fourth quarter. Consequently, the net contribution from the external sector improved from 0.5 percentage points in Q4 to 1.4 percentage points in Q1.

Compared to the previous period, GDP increase a seasonally-adjusted 0.4% in Q1 (previous estimate: 0.0% quarter-on-quarter), which came in well below the 1.5% expansion registered in Q4.

The government expects the economy to expand 1.7% this year. For 2015, the government sees economic growth picking up to 2.0%. The Czech National Bank foresees the economy to expand a strong 2.6% in 2014. For 2015, the Bank sees economic growth accelerating to 3.3%. FocusEconomics Consensus Forecast panelists expect the economy to expand 2.1% in 2014, which is unchanged over the previous month’s projection. For 2015, the panel sees GDP increasing 2.5%.

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Czech Republic GDP Chart

Czech Republic GDP Q1 2014

Note: Year-on-year changes of seasonally-adjusted GDP in %.
Source: Czech Statistical Office (CSO) and FocusEconomics Consensus Forecast.

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