Czech Rep. Economic Outlook
January 14, 2020The economy shifted into a lower gear in Q3 2019 amid ebbing domestic demand. Notably, capital spending contracted for the first time in two-and-a-half years amid a sharp decline in machinery and equipment investment. For its part, household spending remained the engine of growth but weakened, expanding at the softest pace in half a decade amid slower wage gains. Meanwhile, although net trade contributed positively again to the upturn, this was mainly due to waning imports. Turning to Q4, available figures point to a further slowdown in momentum. Industrial production contracted for the fourth consecutive month in November amid a struggling automotive sector, while the manufacturing PMI and business confidence deteriorated further in Q4. On the fiscal front, the Finance Ministry reported on 3 January that the state budget ended 2019 with a narrower deficit than initially anticipated. That said, it was the largest in four years as economic activity slowed and public spending rose.
Czech Republic Economic GrowthEconomic growth is expected to ease this year largely due to weaker domestic demand. Private consumption is poised to lose some traction, but will remain solid overall amid the tight job market and still-strong wage growth. Continued EU funds inflows should also lend support to public investment. Subdued industrial sentiment and global trade uncertainties cloud the outlook. FocusEconomics analysts expect growth of 2.3% in 2020, which is unchanged from last month’s forecast, and 2.4% 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
January 10, 2020
Industrial production fell 3.2% year-on-year in working-day adjusted terms in November, which followed a 0.4% slip recorded in October.
January 2, 2020
The manufacturing Purchasing Managers’ Index (PMI), produced by IHS Markit, rose marginally to 43.6 in December from 43.5 in November, which had marked a four-month low.
December 27, 2019
The economic sentiment indicator, published by the Czech Statistical Office (CSO), bounced back to 93.8 in December from 93.3 in November, which had marked the lowest print since July 2014.
December 18, 2019
On 18 December, the board of the Czech National Bank (CNB) decided to keep the two-week repo rate steady at 2.00%, marking the fifth consecutive hold and coming broadly in line with market expectations.
December 13, 2019
Consumer prices rose 0.2% from the previous month in December, following November’s 0.3% increase.