In the second quarter, GDP grew 2.2% over the same quarter last year, according to revised data published on 8 September. The updated figure was below the 2.4% expansion initially recorded in the 16 August estimate and represented a slowdown compared to the 2.8% expansion observed in the first quarter. The second quarter deceleration mainly reflected a deterioration in total consumption. Private consumption contracted 0.7% year-on-year, below the 0.4% drop tallied in the previous quarter. In the same vein, government consumption fell 1.4% in the second quarter, which marked the fourth consecutive period mired in the red as austerity measures adopted by the government began to bite. In contrast, gross fixed investment increased 3.6% in Q2, which was slightly faster than the 3.4% expansion observed in Q1. Meanwhile, both exports and imports continued to grow, albeit at a slower pace. Exports of goods and services expanded 9.4% in the second quarter, slower than the 14.8% increase in the first quarter. Imports decelerated from a 12.7% increase in Q1 to a 7.9% expansion in Q2. As a result, the net contribution from the external sector to economic growth deteriorated from a 2.6 percentage-point contribution in Q1 to a 1.9 percentage-point contribution in Q2. At the sector level, the deceleration in the second quarter was broad-based, as all three main sectors of the economy slowed over the previous quarter, particularly manufacturing, which decelerated from a 14.6% expansion in Q1 to a 9.7% increase in Q2. A quarter-on-quarter comparison confirms the slowdown suggested by the annual figures, as GDP grew a seasonally and working-day adjusted 0.1% over the previous quarter, below the first quarter's 0.9% expansion. The Central Bank sees the economy growing 2.1% this year, while the Bank revised its growth estimates for 2012 and now expects the economy to expand 2.2%, down from its previous 2.8% estimate. Monetary authorities argued that the austerity measures adopted by the government this year are likely to continue to dent economic growth in the coming year.
Czech Republic GDP
Economy slows down moderately in second quarter
September 8, 2011
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Czech Republic Economic News
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