Czech Republic Economic Forecast

Czech Rep. Economic Outlook

September 8, 2020

Revised national accounts confirmed that restrictions imposed to control the spread of Covid-19 dealt a heavy blow to the economy in Q2. GDP contracted at the sharpest pace on record, on the back of business shutdowns, falling capital and household spending and evaporating foreign demand. Turning to Q3, available indicators suggest the economy is stabilizing, although activity remains subdued. The unemployment rate steadied in July, and although consumer confidence continued to rise in the same month, it fell in August, pointing to downbeat household spending dynamics. On the production side, recovering but still-weak business confidence in July-August, together with PMI readings which remained in stubbornly contractionary territory in the same period, call for caution looking at the pace of recovery ahead.

Czech Republic Economic Growth

This year, the economy is set to contract significantly, as the global health crisis and its associated containment measures hammer domestic and foreign demand. New waves of the virus and sustained economic uncertainty pose key downside risks. Counter-cyclical fiscal and monetary policies should help to cushion the downturn to some extent, however. FocusEconomics analysts see GDP shrinking 6.8% in 2020, which is up 0.4 percentage points from last month’s forecast, before rebounding by 5.2% in 2021.

Czech Republic Economy Data

2015 2016 2017 2018 2019
Population (million)10.510.610.610.610.6
GDP per capita (EUR)16,00816,70818,16419,55520,666
GDP (EUR bn)169176192207220
Economic Growth (GDP, annual variation in %)5.42.44.52.82.5
Consumption (annual variation in %)3.83.54.43.13.0
Investment (annual variation in %)10.3-3.24.07.52.7
Industrial Production (annual variation in %)4.33.46.53.0-0.2
Retail Sales (annual variation in %)5.75.25.54.94.8
Unemployment Rate5.14.02.92.22.0
Fiscal Balance (% of GDP)-0.60.71.50.90.3
Public Debt (% of GDP)40.036.834.732.630.8
Money (annual variation in %)8.46.68.65.67.0
Inflation Rate (CPI, annual variation in %, eop)0.02.02.42.03.2
Inflation Rate (HICP, annual variation in %, eop)-0.12.12.31.6-  
Inflation (PPI, annual variation in %)-2.9-0.30.72.42.1
Policy Interest Rate (%)0.050.050.501.752.00
Stock Market (annual variation in %)1.0-3.617.0-8.513.1
Exchange Rate (vs EUR)27.0327.0225.5425.7825.41
Exchange Rate (vs EUR, aop)27.2827.0326.3325.6525.67
Current Account (% of GDP)0.21.61.40.6-  
Current Account Balance (EUR bn)0.42.73.10.9-0.8
Trade Balance (EUR billion)6.99.19.87.89.4
Exports (EUR billion)116118130136140
Imports (EUR billion)109109120128130
Exports (annual variation in %)4.81.910.24.62.6
Imports (annual variation in %)6.30.010.36.71.6
International Reserves (EUR)59.281.3123124133
External Debt (% of GDP)68.473.489.182.778.5

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Czech Republic Facts

Value Change Date
Bond Yield1.64-1.85 %Dec 31
Exchange Rate22.76-0.66 %Dec 30

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