Czech Republic Economic Forecast

Czech Rep. Economic Outlook

May 8, 2018

Recently released data suggests the economy was in good shape early this year, largely holding pace from the solid performance logged in Q4 2017. A tightening labor market, rising wages in the public and private sectors, and low inflation in recent months likely boosted private consumption in Q1. In parallel, economic sentiment was at its highest level in 10 years in April, propelled by record-high consumer confidence. However, a slowdown in the Eurozone economy in the first quarter likely tempered economic activity, and industrial production growth decelerated markedly in Q1 compared to Q4. Meanwhile, a milestone was reached on the political scene, as the ruling ANO party declared on 2 May that a coalition agreement with the Social Democrats (CSSD) was close to being finalized, which could put an end to months of political turmoil.

Czech Republic Economic Growth

Economic growth is expected to moderate this year but nonetheless remain solid on the back of robust domestic demand. A strengthening labor market should continue fueling private consumption growth, while high capacity utilization should support strong capital spending in the months ahead. FocusEconomics Consensus Forecast panelists see GDP growing 3.5% in 2018, which is up 0.1 percentage points from last month’s projection, and 3.0% in 2019.

Czech Republic Economy Data

20132014201520162017
Population (million)10.510.510.510.610.6
GDP per capita (EUR)14,93214,85416,00816,726-  
GDP (EUR bn)157156169177-  
Economic Growth (GDP, annual variation in %)-0.52.75.42.5-  
Consumption (annual variation in %)0.51.83.83.6-  
Investment (annual variation in %)-2.54.010.4-2.5-  
Industrial Production (annual variation in %)-0.15.04.63.5-  
Retail Sales (annual variation in %)1.25.58.16.4-  
Unemployment Rate7.77.76.55.5-  
Fiscal Balance (% of GDP)-1.2-1.9-0.60.6-  
Public Debt (% of GDP)44.942.240.337.2-  
Money (annual variation in %)5.06.68.46.6-  
Inflation Rate (CPI, annual variation in %, eop)1.40.10.12.0-  
Inflation Rate (HICP, annual variation in %, eop)1.50.1-0.12.1-  
Inflation (PPI, annual variation in %)1.7-3.7-2.9-0.4-  
Policy Interest Rate (%)0.050.050.050.05-  
Stock Market (annual variation in %)-4.8-4.31.0-3.6-  
Exchange Rate (vs EUR)27.4327.7327.0327.02-  
Exchange Rate (vs EUR, aop)25.9927.5327.2827.03-  
Current Account (% of GDP)-0.50.20.81.6-  
Current Account Balance (EUR bn)-0.80.31.52.7-  
Trade Balance (EUR billion)6.58.07.79.5-  
Exports (EUR billion)103110118118-  
Imports (EUR billion)96.7102111109-  
Exports (annual variation in %)-1.37.17.0-0.1-  
Imports (annual variation in %)-2.96.07.8-1.7-  
International Reserves (EUR)40.845.059.481.3-  
External Debt (% of GDP)63.570.170.273.9-  

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Czech Republic Facts

ValueChangeDate
Bond Yield1.95-1.85 %May 21
Exchange Rate21.84-0.66 %May 21
Stock Market1,102-0.10 %May 21

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