Czech Rep. Economic Outlook
September 8, 2020Revised 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 GrowthThis 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.
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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
September 10, 2020
Consumer prices remained unchanged from the previous month in August, following July’s 0.45% rise.
September 1, 2020
The manufacturing Purchasing Managers’ Index (PMI), produced by IHS Markit, increased from 47.0 in July to 49.1 in August, marking the best reading since December 2018.
September 1, 2020
GDP plunged a revised 11.0% year-on-year in Q2 (previously reported: -10.7% yoy), coming in well below the 1.9% contraction seen in the first quarter and marking the worst reading on record, as the full impact of the Covid-19 health crisis took its toll on activity.
August 24, 2020
The economic sentiment indicator, published by the Czech Statistical Office (CSO), edged up to 87.0 in August (July: 86.7). The business confidence index continued to rise in August, coming at 85.5, up from July’s 84.7 reading.
August 13, 2020
Consumer prices ticked up 0.45% over the last month in July, a softer increase than June’s 0.63% rise.