Czech Republic GDP Q1 2020

Czech Republic

Czech Republic: Economy contracts at sharpest pace in over a decade in Q1 on coronavirus woes

May 15, 2020

The economy shrank 2.2% in year-on-year, seasonally-adjusted terms in the first quarter (Q4 2019: +2.0% year-on-year), according to a preliminary release by the Czech Statistical Office (CSO) on 15 May. The downturn, which was largely due to the coronavirus outbreak and the government restrictions that were imposed in March to contain its spread, was the steepest since Q4 2009. Meanwhile, on a quarter-on-quarter basis, GDP collapsed 3.6% in Q1 (Q4 2019: +0.5% quarter-on-quarter)—the worst result on record and on par with the severe downturns recorded in the Eurozone, reflective of the economy’s close ties with developments there.

Although a detailed breakdown is yet to be released, the decline in activity was driven by depressed foreign demand and capital investment, while public spending cushioned the downturn somewhat. On the supply side, the manufacturing and services sector reeled as the coronavirus prompted the shutdown of factories and a large swath of businesses.

More detailed national accounts data will be released on 2 June.

The Czech Central Bank projects the economy to shrink 8.0% this year and grow 4.0% in 2021. FocusEconomics Consensus Forecast panelists, meanwhile, see GDP falling 5.9% in 2020, which is down 1.9 percentage points from the previous month’s projection, before growing 4.8% in 2021

Author:, Economist

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Czech Republic GDP Chart

Czech Republic GDP Q4  2019 2

Note: Year-on-year changes of seasonally-adjusted GDP in %.
Source: Czech Statistical Office (CSO) and FocusEconomics Consensus Forecast.

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