Economic activity was below CNB forecast at start of this year
According to the CZSO’s estimate released today, GDP adjusted for price, seasonal and calendar effects declined by 0.7% year on year in 2012 Q1. In quarter-on-quarter terms, it decreased by 0.8%. Compared to the current CNB forecast, the change in economic activity recorded in 2012 Q1 is 0.7 percentage point lower in both year-on-year and quarter-on-quarter terms.
The expenditure structure of economic activity in 2012 Q1 also recorded deviations from the CNB forecast. The decline in household consumption was more pronounced than expected by the CNB. Year-on-year growth in fixed investment lagged well behind the CNB forecast. The decline in inventories was also slightly stronger than forecasted by the CNB. Owing to the above developments, total gross capital formation recorded a year-on-year fall rather than the expected stagnation. The impact of these deviations was partially offset by a higher-than-expected contribution of the year-on-year change in net exports to economic activity. This was due to slightly higher-than-expected year-on-year growth in real exports of goods and services, while the forecast for total import growth was fulfilled. The year-on-year decline in government consumption, reflecting continued fiscal consolidation, was rather more moderate than expected by the CNB.
The published data represent a downside risk for the CNB forecast in the area of domestic economic activity, although they are also partly influenced by some one-off factors (according to the CZSO, an extraordinary decline in the volume of excise tax on tobacco products and VAT). According to the baseline scenario of the current forecast, the Czech economy will stagnate this year. The subdued economic activity will reflect a substantial slowdown of external demand and continued domestic fiscal consolidation. GDP will grow again in 2013 (by 1.9%) as external demand recovers. In the alternative scenario of the CNB forecast, which incorporates the impacts of additional budgetary consolidation measures recently adopted by the government, GDP growth in 2013 is around 0.8 percentage point lower than in the baseline scenario.
Tomáš Holub, Executive Director, Monetary and Statistics Department
The CNB comments on the GDP figures for 2012 Q1
Economic activity was below CNB forecast at start of this year
According to the CZSO’s estimate released today, GDP adjusted for price, seasonal and calendar effects declined by 0.7% year on year in 2012 Q1. In quarter-on-quarter terms, it decreased by 0.8%. Compared to the current CNB forecast, the change in economic activity recorded in 2012 Q1 is 0.7 percentage point lower in both year-on-year and quarter-on-quarter terms.
The expenditure structure of economic activity in 2012 Q1 also recorded deviations from the CNB forecast. The decline in household consumption was more pronounced than expected by the CNB. Year-on-year growth in fixed investment lagged well behind the CNB forecast. The decline in inventories was also slightly stronger than forecasted by the CNB. Owing to the above developments, total gross capital formation recorded a year-on-year fall rather than the expected stagnation. The impact of these deviations was partially offset by a higher-than-expected contribution of the year-on-year change in net exports to economic activity. This was due to slightly higher-than-expected year-on-year growth in real exports of goods and services, while the forecast for total import growth was fulfilled. The year-on-year decline in government consumption, reflecting continued fiscal consolidation, was rather more moderate than expected by the CNB.
The published data represent a downside risk for the CNB forecast in the area of domestic economic activity, although they are also partly influenced by some one-off factors (according to the CZSO, an extraordinary decline in the volume of excise tax on tobacco products and VAT). According to the baseline scenario of the current forecast, the Czech economy will stagnate this year. The subdued economic activity will reflect a substantial slowdown of external demand and continued domestic fiscal consolidation. GDP will grow again in 2013 (by 1.9%) as external demand recovers. In the alternative scenario of the CNB forecast, which incorporates the impacts of additional budgetary consolidation measures recently adopted by the government, GDP growth in 2013 is around 0.8 percentage point lower than in the baseline scenario.
Tomáš Holub, Executive Director, Monetary and Statistics Department