Czech Rep. Economic Outlook
November 3, 2020A preliminary estimate revealed that the economy rebounded in Q3, following an unprecedented contraction in Q2 as the country felt the full brunt of lockdown measures. Although a detailed breakdown for Q3 is yet to be released, improving retail sales and consumer confidence hint at recovering household spending, while rebounding industrial production and business sentiment indicate stronger private sector activity. Moving to Q4, the picture is turning gloomier. Due to a sharp rise in new Covid-19 cases, the government declared a state of emergency and renewed strict containment measures in early October. The worsening health situation risks derailing the incipient recovery, as suggested by flagging business and consumer confidence in October. That said, the administration recently extended part of its short-term work scheme, and approved a relief plan for the hardest-hit businesses.
Czech Republic Economic GrowthAfter suffering a severe recession this year due to the Covid-19 blow, the economy is seen rebounding strongly next year as domestic and foreign demand recover, and fiscal and monetary measures provide further support. That said, key downside risks remain, including the prolongation of the health crisis and disrupted European automotive supply chains. FocusEconomics analysts see GDP expanding 4.5% in 2021, which is down 0.4 percentage points from last month’s forecast, and 4.0% in 2022.
Czech Republic Economy Data
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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
November 24, 2020
The economic sentiment indicator, published by the Czech Statistical Office (CSO), fell to 82.0 in November (October: 86.4), marking the weakest reading in five months. The business confidence index decreased in November, coming in at 81.7, down from October’s 86.5 reading.
November 10, 2020
Consumer prices increased 0.18% from the previous month in October, contrasting September’s 0.62% decrease.
November 6, 2020
Industrial production declined 1.5% year-on-year in working-day adjusted terms in September, which followed August’s 5.5% drop and marked the softest fall since February.
November 5, 2020
At its 5 November meeting, the board of the Czech National Bank (CNB) unanimously decided to keep the two-week repo rate unchanged at 0.25%, in line with market expectations and marking the fourth consecutive hold.
November 2, 2020
The manufacturing Purchasing Managers’ Index (PMI), produced by IHS Markit, increased from 50.7 in September to 51.9 in October, marking the best reading since October 2018.