Czech Republic: Economic growth remains broadly stable in first quarter
May 13, 2011
According to the flash estimate released on 13 May by the National Statistics Office, GDP grew 2.5% in the first quarter over the same period last year, which was only a notch below the previous quarter's growth of 2.6%. The expansion was broadly in line with market expectations but overshot the Central Bank's growth estimate of 2.3%. According to the National Statistics Office, the main driver behind the expansion was a stronger external sector, with exports pushing higher and exceeding import growth. In contrast, domestic demand remained subdued, dragged by a weak expansion in government consumption as a result of the austerity measures implemented by the government. A quarter-on-quarter comparison supports the notion of the relatively robust expansion implied by the annual data, as GDP grew a seasonally and working-day adjusted 0.6% over the previous quarter. Complete and more detailed data will be published on 9 June. Owing to the significant austerity measures adopted by the government, the Central Bank sees the economy growing a moderate 1.5% this year, which was revised down from its previous 1.6% estimate. For 2012, the Bank expects economic growth to accelerate to 2.8%, which is also down from its previous 3.0% projection.
Author: Ricardo Aceves, Senior Economist