Economic activity was below CNB forecast in 2012 Q2
According to the CZSO’s estimate released today, GDP adjusted for price, seasonal and calendar effects declined by 1% year on year in 2012 Q2. In quarter-on-quarter terms, it decreased by 0.2%. Compared to the current CNB forecast, the reported growth in economic activity in 2012 Q2 is 0.6 percentage point lower in year-on-year terms and 0.8 percentage point lower in quarter-on-quarter terms. This difference in the deviation from the CNB forecast is due to a revision of the GDP estimate for 2012 Q1, which the CZSO also published today.
The expenditure structure of economic activity in 2012 Q2 also recorded deviations from the CNB forecast. The decline in household consumption was more pronounced than expected by the CNB. By contrast, the year-on-year stagnation of fixed investment defied the CNB’s expectations that this demand component would record a significant year-on-year decline. However, this deviation was partly offset by changes in inventories, which decreased considerably rather than recording the expected year-on-year stagnation. Owing to the above developments, total gross capital formation fell somewhat less than expected by the CNB. The year-on-year decline in government consumption, reflecting continuing fiscal consolidation, roughly fulfilled the CNB’s expectations. The year-on-year rates of growth of real exports and imports of goods and services lagged somewhat behind the CNB’s expectations, amid a slightly smaller-than-expected year-on-year improvement in net exports.
The published data represent a downside risk to the current CNB forecast in the area of domestic economic activity. According to the forecast, a marked slowdown in external demand and generally subdued domestic demand amid continuing fiscal consolidation will lead to a decline of almost 1% in the Czech economy this year. Net exports will be the only component to make a positive contribution to economic growth. Next year, GDP growth will edge up as external demand gradually recovers. Growth will be fostered by all expenditure components except government consumption.
Tomáš Holub, Executive Director, Monetary and Statistics Department
The CNB comments on the GDP figures for 2012 Q2
Economic activity was below CNB forecast in 2012 Q2
According to the CZSO’s estimate released today, GDP adjusted for price, seasonal and calendar effects declined by 1% year on year in 2012 Q2. In quarter-on-quarter terms, it decreased by 0.2%. Compared to the current CNB forecast, the reported growth in economic activity in 2012 Q2 is 0.6 percentage point lower in year-on-year terms and 0.8 percentage point lower in quarter-on-quarter terms. This difference in the deviation from the CNB forecast is due to a revision of the GDP estimate for 2012 Q1, which the CZSO also published today.
The expenditure structure of economic activity in 2012 Q2 also recorded deviations from the CNB forecast. The decline in household consumption was more pronounced than expected by the CNB. By contrast, the year-on-year stagnation of fixed investment defied the CNB’s expectations that this demand component would record a significant year-on-year decline. However, this deviation was partly offset by changes in inventories, which decreased considerably rather than recording the expected year-on-year stagnation. Owing to the above developments, total gross capital formation fell somewhat less than expected by the CNB. The year-on-year decline in government consumption, reflecting continuing fiscal consolidation, roughly fulfilled the CNB’s expectations. The year-on-year rates of growth of real exports and imports of goods and services lagged somewhat behind the CNB’s expectations, amid a slightly smaller-than-expected year-on-year improvement in net exports.
The published data represent a downside risk to the current CNB forecast in the area of domestic economic activity. According to the forecast, a marked slowdown in external demand and generally subdued domestic demand amid continuing fiscal consolidation will lead to a decline of almost 1% in the Czech economy this year. Net exports will be the only component to make a positive contribution to economic growth. Next year, GDP growth will edge up as external demand gradually recovers. Growth will be fostered by all expenditure components except government consumption.
Tomáš Holub, Executive Director, Monetary and Statistics Department