Czech Republic: Economic growth slows in fourth quarter
March 9, 2012
In the fourth quarter, GDP expanded 0.6% over the same quarter the previous year in seasonally and calendar adjusted terms, according to revised data released by the statistical institute on 9 March. The quarterly print was slightly down from the 15 February 0.5% flash estimate, and represents the weakest expansion registered since the economy came out of recession in the first quarter of 2010. In the full year 2011, the economy grew 1.7%, below the 2.6% expansion tallied in 2010. The quarterly slowdown mainly reflects a further deterioration in domestic demand, although the external sector also weakened somewhat compared to the previous quarter. Total consumption fell 1.0% in Q4, amid a contraction in both private and government consumption. Gross fixed investment declined 1.7%, following the 2.2% contraction in the third quarter; moreover, a downward shift in inventories shaved 0.6 percentage points off overall economic growth. Meanwhile, exports of goods and services slowed from an 8.4% expansion in the third quarter to a 5.0% increase in the fourth. Imports grew 1.8% in Q4, weaker than the 3.5% increase observed in the previous period. As a result, the external sector's net contribution to overall economic growth deteriorated from 4.1 percentage points in Q3 to 2.7 percentage points in Q4. A quarter-on-quarter comparison saw economic growth dropping a seasonally adjusted 0.1% in Q4, which followed a decline of the same magnitude in Q3. The Czech National Bank expects GDP growth to remain flat this year. For 2013, the Bank sees the economy expanding 1.9%.
Author: Ricardo Aceves, Senior Economist