Skyline of Prague, Czech Republic

Czech Republic GDP Q2 2020

Czech Republic: GDP records largest drop on record in Q2 amid Covid-19 health crisis

GDP plunged a revised 11.0% year-on-year in Q2 (previously reported: -10.7% yoy), coming in well below the 1.9% contraction seen in the first quarter and marking the worst reading on record, as the full impact of the Covid-19 health crisis took its toll on activity. Similarly, on a seasonally-adjusted quarter-on-quarter basis, GDP declined 8.7% in Q2 (previously reported: -8.4% s.a. qoq), down from the previous quarter’s 3.3% fall.

The annual downturn reflected notable contractions in both domestic and foreign demand. Household spending fell 7.6% in Q2, well below Q1’s 0.2% contraction, as containment measures to halt the spread of the virus battered non-essential business activity and consumption. Meanwhile, fixed investment declined 4.8% in Q2, a softer decrease than the previous quarter’s 5.2% fall, while public consumption growth slowed to 1.8% (Q1: +4.9%).

On the external front, exports of goods and services fell 23.3% in Q2, markedly below Q1’s 1.9% contraction, amid a weak international trading environment and disrupted supply chains. In addition, imports of goods and services dropped at a more pronounced pace of 18.2% in Q2 (Q1: -1.4%). The external sector as a whole therefore subtracted 5.6 percentage points from the headline reading in Q2, following the 0.5 percentage-point subtraction in the previous quarter.

Commenting on the outlook, Jakub Seidler, chief economist at ING Czech Republic, reflected:

“As revised figures did not change much from the preliminary estimates, we still expect the Czech economy to fall around 7% this year. However, the final figure will depend on the rate of the global recovery in the second half of the year, which remains more uncertain due to the Covid-19 situation. […] Although the worst is behind us in terms of falling GDP, many economic indicators might start to deteriorate with a delay, and especially after the end of government support programmes, notably the unemployment rate.”

Free sample report

Access essential information in the shortest time possible. FocusEconomics provide hundreds of consensus forecast reports from the most reputable economic research authorities in the world.
Close Left Media Arrows Left Media Circles Right Media Arrows Right Media Circles Arrow Quote Wave Address Email Telephone Man in front of screen with line chart Document with bar chart and magnifying glass Application window with bar chart Target with arrow Line Chart Stopwatch Globe with arrows Document with bar chart in front of screen Bar chart with magnifying glass and dollar sign Lightbulb Document with bookmark Laptop with download icon Calendar Icon Nav Menu Arrow Arrow Right Long Icon Arrow Right Icon Chevron Right Icon Chevron Left Icon Briefcase Icon Linkedin In Icon Full Linkedin Icon Filter Facebook Linkedin Twitter Pinterest