Czech Republic: Growth wanes to one-year low in Q3
The economy grew 2.5% in year-on-year, seasonally- and price-adjusted terms in the third quarter, below the 2.8% upturn logged in the second quarter, according to a preliminary release by the Czech Statistical Office (CSO) on 14 November. The pace of expansion slightly undershot market expectations and was the lowest in a year.
Both domestic and external demand contributed to the outturn. Although a detailed breakdown is yet to be released, private consumption, which has been supported by the tight job market and solid real wage gains, likely remained the engine of growth, while net trade fared well despite the subdued external environment. On the supply side, solid activity in the trade, hospitality, transportation and storage, and information and communication industries underpinned the expansion.
On a quarter-on-quarter basis, GDP growth came in at 0.3% in Q3, well below Q2’s 0.7% climb.
Commenting on the economy’s outlook for next year, Jakub Seidler, chief economist at ING Czech Republic, noted:
“Some positive news is that the German economy avoided a technical recession in the third quarter, with modest QoQ growth of 0.1%, while the market expected a slightly negative figure. But developments abroad remain fragile and it will be crucial for the growth of the domestic economy next year. Right now, we expect the domestic economy to slow further to 2% in 2020”.
More detailed national accounts data will be released on 29 November.