Czech Republic: Economic growth loses momentum in Q2 but remains solid
Annual GDP growth slowed considerably from 4.2% in Q1 to 2.3% in Q2 in seasonally- and price-adjusted terms, according to preliminary data released by the Czech Statistical Office (CSO) on 14 August. The second-quarter expansion was the weakest in a year and a half, although it largely reflected a high base effect. The main contributors to the Q2 figure were capital expenditure and household spending growth, which was likely buttressed by a robust job market and healthy wage gains. On a quarter-on-quarter basis, GDP growth remained steady at Q1’s 0.5%.
Despite the moderation in annual growth in Q2, the outlook remains largely positive. An exceedingly tight labor market and a planned increase in public spending should underpin growth going forward. More detailed data will be released on 31 August.