Czech Republic: Economy contracts most in three years in Q3
November 15, 2012
In the third quarter, GDP contracted 1.5% over the same period last year, according to the flash estimate released by the Czech Statistical Office (CZSO) on 15 November. The contraction exceeded both the 1.0% decline observed in the second quarter as well as market expectations of a 1.1% drop. The contraction marks, in fact, the largest decline recorded since the final quarter of 2009. Although the statistical office did not provide a detailed breakdown of GDP data, according to the CZSO, the deterioration in the third quarter was caused by a "gradually weakening domestic demand, especially decreasing investments in structures, machinery equipment and transport equipment". The CZSO added that "surpluses of external trade were not able to compensate the falling domestic consumption". On a quarter-on-quarter basis, GDP declined a seasonally adjusted 0.3%, which exceeded both the 0.2% contraction observed in the second quarter as well as market expectations of a 0.2% drop. A complete and more detailed data set will be published on 7 December.
Author: Ricardo Aceves, Senior Economist