Czech economic growth in the 3rd quarter has slowed to 2.5 percent
year-on-year, according to data released by the Czech Statistics Office.
Compared to the 2nd quarter GDP rose by 0.4 percent.
Analysts say this confirms the predicted slow-down in economic growth, although compared to the situation in Germany, the Czech Republic’s main export destination, the Czech figures are still viewed as positive.
Economic growth in 2018 reached 2.9 percent and the prediction for this year is 2.5 percent.
The European Commission on Thursday revised its outlook for Czech economic
growth for this year. In the newly released macro-economic forecast it sees
the country’s gross domestic product growth falling to 2.5 percent.
The report expects growth next year to reach 2.2 percent. Earlier this year it predicted a figure of 2.5 percent for 2020.
The Czech Republic is now ahead of Spain in terms of GDP per capita adjusted to purchasing power parity (PPP). At least according to the latest OECD data, which show the country ranked 27th among the organisation’s 36 member states, with Spain one place behind, news site Aktuálně reports. However, the country still ranks bellow the EU average.
Trust in the Czech economy experienced a slight increase in August according to the results of a monthly survey conducted by the Czech Statistics Office released on Monday. The rise is particularly thanks to greater optimism in the trade and services sectors. However, industry trust remains at a six year low and consumer trust has decreased.
New research by scientists from the Water, Soil and Landscape Centre at the
Czech University of Life Sciences suggests that another long-term spell of
drought would result in an CZK 80 billion contraction of the Czech economy.
Aside from financial effects, drought would also have an impact on
population health and the environment. At a press conference on Wednesday
the team suggested spending CZK 25 billion annually on preventative
Researchers presented two scenarios of how the economy could be impacted by further droughts.
One scenario envisions a 25 percent decrease in the productivity of industries, such as textile or paper production, which are dependent on water supplies. In this case the economy would face a production capability decline between 0.9 to 1.6 percent of GDP.
The second scenario, counts on a 50 percent decrease that would cut production down by 2.8 to 4.8 percent of GDP.
The Czech economy is expected to grow by 2.6 percent this year, following a
3 percent expansion in 2018, according to the latest forecast from
For the coming year, the European Commission foresees growth of 2.5 percent, again mainly fuelled by solid growth in household consumption, with investment growth expected to ‘normalise’.
Private consumption is likely to remain the main growth driver and should continue to benefit from swift growth in wages and pension incomes, and robust consumer confidence, the EC said.
The trade balance is set to deteriorate over the forecast horizon and detract from GDP growth in 2019, before turning neutral in 2020, the forecast says.
The possible introduction of a sector tax on banks in the Czech Republic would lead to a knock-on increase in the cost of financial products, according to an analysis conducted by the Centre for Economic and Market Analyses (CETA) published on Tuesday. This would mainly concern higher mortgage rates and more expensive loans for entrepreneurs, the study found.
The Czech government expects economic growth to be driven mainly by rising
household demand in 2020. According to the draft Convergence Programme
submitted to the European Commission, Czech GDP should grow 2.4 percent
next year, down from nearly 3 percent growth in 2018.
According to projections released earlier in May by the Czech National Bank, however, the economy should grow by 2.5 percent in 2019 and 2.8 percent in 2020.
Analysts warn the risks are skewed in the direction of weaker growth, mainly due to slowing industrial production and external demand.
The Czech National Bank has lowered its forecast for the development of
public finances in 2019 and 2020, in its Inflation Reports summary
published on Friday. The bank now expects a surplus of 0.3 percent of GDP
in 2019, as opposed to February’s more optimistic estimate of 1.2
percent. The new expectations for 2020 have gone down even more sharply
from February’s 1.3 percent to the current forecast of 0.2 percent. This
year, public debt is expected to sink from 32.7 percent of GDP to 30.9
percent. Next year, a further decrease to 29.3 percent forecast.
In a prognosis released on Thursday, the bank also lowered the country’s economic growth projection to 2.5 percent in 2019 and 2.8 percent in 2020. A further decrease in the Czech crown’s exchange rate is also expected.