Czech Republic: Industrial production contracts for second consecutive month
August 6, 2012
In June, industrial production declined 2.2% over the same month last year, which marked an slightly improvement over the 2.4% contraction recorded in May and was virtually in line with market expectations that had industrial output declining 2.0%. The reading reflected deteriorations in manufacturing output and energy supply. In contrast, output in mining and quarrying improved over the previous month. A month-on-month assessment confirms the decline suggested by annual figures, as industrial output dropped 0.3% in June, which followed the 0.2% declined recorded in May. As a result of the drop, the trend continues to point downwards, with annual average variation falling from 2.8% in May to 2.0% in June, the slowest pace in two years. Meanwhile, the Central Bank recently revised its GDP growth forecast for this year and now expects the economy to contract 0.9%, which is below its previous zero-growth projection. For 2013, the Bank foresees economic growth of 0.8%, which is well below from its previous 1.9% estimate. The Bank cited marked deceleration in global demand and weak growth in domestic demand against a backdrop of fiscal consolidation.