Czech Republic GDP

Czech Republic

Czech Republic: Economy expands in Q2 at fastest pace in over seven years

August 28, 2015

In Q2 2015, the economy expanded a seasonally- and calendar-adjusted 4.4% over the same quarter of the previous year, according to more complete data released by the Czech Statistical Office (CZO) on 28 August. The reading met the flash estimate and represented the fastest expansion since Q4 2007. In addition, the reading marked an acceleration compared to Q1’s 4.0% year-on-year expansion. Q2’s pickup was driven by a better performance of the external sector and, to a lesser extent, by stronger private consumption.

Private consumption rose 3.1% in annual terms in Q2, which was up slightly from the 3.0% increase observed in Q1 and marked the largest expansion since Q2 2008. Conversely, government spending decelerated slightly from a 2.6% rise in the first quarter to a weaker 2.5% increase in the second quarter. Total investment growth slowed from Q1’s remarkable 11.0% to 8.4% in Q2.

On the external side of the economy, exports of goods and services decelerated marginally from a 7.1% increase in Q1 to a 7.0% rise in Q2. Imports also decelerated, moderating from an 8.6% increase in the first quarter to a 7.1% rise in the second quarter. Consequently, the net contribution from the external sector swung from minus 0.6 percentage points in Q1 to plus 0.3 percentage points in Q2.

Compared to the previous period, GDP grew a seasonally-adjusted 1.0%, undershooting the 2.4% expansion recorded in the previous quarter, which had marked the largest quarterly expansion on record.

The Czech National Bank expects the economy to expand 2.6% in 2015. For 2016, the Bank sees economic growth picking up to 3.0%. FocusEconomics Consensus Forecast panelists expect the economy to expand 3.4% in 2015, which is up 0.2 percentage points over the previous month’s projection. For 2016, the panel sees GDP increasing 2.8%.

Author: Teresa Kersting, Economist

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Czech Republic GDP Chart

Czech Republic GDP Q2 2015

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

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