Growth in economic activity comes in above CNB forecast
According to the CZSO’s estimate released today, GDP adjusted for price, seasonal and calendar effects rose by 2.4% year on year in 2010 Q2. In quarter-on-quarter terms, it was up by 0.9%. The increase recorded in economic activity is 0.6 percentage point higher than the current CNB forecast in both year-on-year and quarter-on-quarter terms.
The higher-than-forecasted annual GDP growth is largely due to a surprising increase in household consumption, as the CNB had expected it to decline further in year-on-year comparison. This deviation is partly linked with the fact that, according to revised CZSO data, the annual decline in consumption expenditure halted in the first quarter of this year. On the other hand, growth in government consumption lagged slightly behind CNB expectations. By contrast, the CNB’s assumption that gross capital formation would start growing after many quarters of decline and that this growth would be driven by a recovery in inventories was confirmed. Growth in exports and imports of goods and services was only slightly higher than forecasted and the CNB’s expectation that the year-on-year change in net exports would not be significant was confirmed as well.
The data released today confirm that the Czech economy has clearly emerged from recession. At the same time, the CNB’s expectation that re-stocking together with rising government consumption would be the factors behind economic growth is materialising; surprisingly, however, these factors were joined by household consumption. The current CNB forecast expects the economy to grow at a rate of about 2% in the second half of this year and next year, with a temporary slowdown in late 2010 and early 2011. In 2012 the growth will pick up significantly. However, this forecast does not yet take into account the impacts of the public budget consolidation currently under preparation.
Tomáš Holub, Executive Director, Monetary and Statistics Department
The CNB comments on the GDP figures for 2010 Q2
Growth in economic activity comes in above CNB forecast
According to the CZSO’s estimate released today, GDP adjusted for price, seasonal and calendar effects rose by 2.4% year on year in 2010 Q2. In quarter-on-quarter terms, it was up by 0.9%. The increase recorded in economic activity is 0.6 percentage point higher than the current CNB forecast in both year-on-year and quarter-on-quarter terms.
The higher-than-forecasted annual GDP growth is largely due to a surprising increase in household consumption, as the CNB had expected it to decline further in year-on-year comparison. This deviation is partly linked with the fact that, according to revised CZSO data, the annual decline in consumption expenditure halted in the first quarter of this year. On the other hand, growth in government consumption lagged slightly behind CNB expectations. By contrast, the CNB’s assumption that gross capital formation would start growing after many quarters of decline and that this growth would be driven by a recovery in inventories was confirmed. Growth in exports and imports of goods and services was only slightly higher than forecasted and the CNB’s expectation that the year-on-year change in net exports would not be significant was confirmed as well.
The data released today confirm that the Czech economy has clearly emerged from recession. At the same time, the CNB’s expectation that re-stocking together with rising government consumption would be the factors behind economic growth is materialising; surprisingly, however, these factors were joined by household consumption. The current CNB forecast expects the economy to grow at a rate of about 2% in the second half of this year and next year, with a temporary slowdown in late 2010 and early 2011. In 2012 the growth will pick up significantly. However, this forecast does not yet take into account the impacts of the public budget consolidation currently under preparation.
Tomáš Holub, Executive Director, Monetary and Statistics Department