Czech Rep. Economic Outlook
May 12, 2020Available data is starting to show the scale of the Covid-19 crisis, with a larger blow expected in the second quarter. Output in the industrial sector, which had already been reeling for months, collapsed in March at the sharpest pace since the heights of the 2009 global financial crisis as car manufacturing plants shut down operations, which was also reflected in a severe drop in merchandise exports. On the consumer side, retail sales suffered a historic slump as a result of the lockdown measures during the latter half of March to contain the virus’ spread. Turning to Q2, the manufacturing PMI tumbled to an 11-year low in April, while both business and consumer sentiment nosedived—hinting that the worst of the pandemic’s impact is yet to come. Meanwhile, the government announced in late April that it will start to gradually open up the economy in May amid positive signs that the virus is under control.
Czech Republic Economic GrowthThe pandemic and associated containment measures enacted at home and abroad will cause a severe economic slump this year. Private consumption is set to contract as households defer spending and build up their savings, while investment will suffer amid high uncertainty and disruptions to value chains. Exports will also be hard hit due to depressed foreign demand. FocusEconomics analysts see GDP shrinking 5.9% in 2020, which is down 1.9 percentage points from last month’s forecast, before rebounding by 4.8% in 2021.
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Czech Republic Facts
|Bond Yield||1.64||-1.85 %||Dec 31|
|Exchange Rate||22.76||-0.66 %||Dec 30|
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Czech Republic Economic News
July 7, 2020
Industrial output plummeted 25.7% year-on-year in working-day adjusted terms in May, which followed April's 33.7% record-breaking collapse.
July 1, 2020
The manufacturing Purchasing Managers’ Index (PMI), produced by IHS Markit, jumped to 44.9 in June from 39.6 in May.
June 24, 2020
The economic sentiment indicator, published by the Czech Statistical Office (CSO), continued to climb from April’s over two-decade low in June, coming in at 77.2 (May: 75.1). The business confidence index bounced back in June to 93.3 (May: 91.9) after declining for five consecutive months.
June 24, 2020
At its 24 June meeting, the board of the Czech National Bank (CNB) unanimously decided to leave the two-week repo rate unchanged at 0.25%, meeting market expectations and following the 75-basis-points cut delivered in the previous May meeting.
June 10, 2020
Consumer prices rose 0.4% from the previous month in May, following April’s 0.2% dip.