Czech Republic: Economy slows in the third quarter
November 15, 2011
In the third quarter, GDP expanded 1.5% over the same period last year, according to a preliminary flash estimate release by the Czech Statistics Office (CSO) on 15 November. The quarterly reading represented a deceleration compared to the 2.2% expansion observed in the second quarter and fell short of both market expectations of a 1.6% rise and the Central Bank's growth estimate of 1.7%. A quarter-on-quarter comparison suggests a sharper deterioration of the economy than the deceleration suggested by the annual figures, as GDP remained unchanged in seasonally adjusted terms, which contrasted the 0.1% increase observed in the second quarter. More detailed data will be published on 9 December. The Central Bank sees the economy growing 2.0% in 2011, which is virtually unchanged from its previous 2.1% estimate. However, for 2012 the Bank cut its growth projections and now expects the economy to expand 1.2%, down from its previous 2.2% estimate. Monetary authorities stated that the austerity measures adopted by the government and the ongoing slowdown in the Eurozone (the country's main exports destination) will dent economic growth in the coming year.
Author: Ricardo Aceves, Senior Economist