Czech Republic Economic Forecast

Czech Rep. Economic Outlook

May 12, 2020

Available 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 Growth

The 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.

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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