Growth in economic activity comes in just below CNB forecast at end of last year
According to the CZSO’s estimate released today, GDP adjusted for price, seasonal and calendar effects rose by 0.6% year on year in 2011 Q4. In quarter-on-quarter terms, it was down by 0.1%. Compared to the current CNB forecast, the reported change in economic activity in 2011 Q4 is 0.1 percentage point lower in both year-on-year and quarter-on-quarter terms. In 2011 as a whole, GDP increased by 1.7%.
Turning to the structure of annual GDP growth, the CNB’s expectations of a continuing marked year-on-year decline in both household and government consumption due to fiscal restriction and a still subdued labour market were fulfilled in 2011 Q4. The forecast for a renewed year-on-year decline in fixed investment was also approximately fulfilled. However, there was a marked downward deviation from the forecast for gross capital formation overall. This was due to a significant and unexpected reduction in inventories at the end of last year. However, this deviation was largely offset by a higher-than-expected positive contribution of year-on-year change in net exports to GDP growth. Although year-on-year growth in exports of goods and services was lower than forecasted by the CNB, the growth rate of imports lagged even more significantly behind the forecast.
According to the current forecast, the Czech economy will remain flat this year. Subdued domestic demand and a negative contribution of net exports will reflect a marked slowdown in external demand and continuing domestic fiscal consolidation. GDP will start rising again in 2013 as external demand recovers.
Tomáš Holub, Executive Director, Monetary and Statistics Department
The CNB comments on the GDP figures for 2011 Q4
Growth in economic activity comes in just below CNB forecast at end of last year
According to the CZSO’s estimate released today, GDP adjusted for price, seasonal and calendar effects rose by 0.6% year on year in 2011 Q4. In quarter-on-quarter terms, it was down by 0.1%. Compared to the current CNB forecast, the reported change in economic activity in 2011 Q4 is 0.1 percentage point lower in both year-on-year and quarter-on-quarter terms. In 2011 as a whole, GDP increased by 1.7%.
Turning to the structure of annual GDP growth, the CNB’s expectations of a continuing marked year-on-year decline in both household and government consumption due to fiscal restriction and a still subdued labour market were fulfilled in 2011 Q4. The forecast for a renewed year-on-year decline in fixed investment was also approximately fulfilled. However, there was a marked downward deviation from the forecast for gross capital formation overall. This was due to a significant and unexpected reduction in inventories at the end of last year. However, this deviation was largely offset by a higher-than-expected positive contribution of year-on-year change in net exports to GDP growth. Although year-on-year growth in exports of goods and services was lower than forecasted by the CNB, the growth rate of imports lagged even more significantly behind the forecast.
According to the current forecast, the Czech economy will remain flat this year. Subdued domestic demand and a negative contribution of net exports will reflect a marked slowdown in external demand and continuing domestic fiscal consolidation. GDP will start rising again in 2013 as external demand recovers.
Tomáš Holub, Executive Director, Monetary and Statistics Department