Czech Republic Economic Forecast

Czech Rep. Economic Outlook

January 11, 2022

A second estimate revised up GDP growth for Q3, confirming strong underlying momentum. That said, economic dynamics should have cooled somewhat in the last quarter of 2021. Consumer confidence fell considerably on average in the quarter, amid soaring price pressures and the spread of the Omicron variant. Meanwhile, business sentiment also weakened, albeit to a lesser extent, while PMI readings continued to show sustained expansions in manufacturing activity throughout the quarter. On the external front, falling merchandise exports in October point to some weakness in the sector. In politics, Prime Minister Petr Fiala's new center-right government took office in mid-December and pledged to tackle the Covid-19 pandemic and mounting inflation. It will ask the lower house for a vote of confidence this month. The country started 2022 on a provisional budget, which should last until the end of March.

Czech Republic Economic Growth

GDP should expand at a quicker pace in 2022, thanks to the lifting of restrictions as the impact of the pandemic fades. Accumulated savings and the inflow of EU funds amid expansionary fiscal policies should provide a short-term boost to the economy. However, pandemic-related uncertainty, high energy prices and prolonged supply constraints cloud the outlook. FocusEconomics analysts see GDP expanding 4.2% in 2022, which is down 0.1 percentage points from last month’s forecast, and 3.9% in 2023.

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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