Growth in economic activity comes in broadly in line with CNB forecast in 2018 Q2
The CNB comments on the GDP figures for 2018 Q2
According to the CZSO’s estimate released today, gross domestic product adjusted for price, seasonal and calendar effects rose by 2.4% year on year in 2018 Q2. In quarter-on-quarter terms, economic activity increased by 0.7%. The rate of economic growth is thus slackening temporarily in line with the CNB forecast, due to slowing growth in external demand combined with increasingly strong supply-side constraints on the domestic economy.
The economic growth recorded in 2018 Q2 was only slightly below the CNB forecast in both year-on-year and quarter-on-quarter terms. In contrast to the forecast, a negative contribution was recorded for change in inventories. However, it was almost fully offset by a less negative contribution of net exports. In line with the prediction, private consumption is continuing to grow robustly despite slowing somewhat. Growth in government consumption also slowed and was below the forecast. The forecast for fixed investment broadly materialised.
Overall, growth in economic activity slowed further from its previous high rates in 2018 Q2, in line with the forecast. According to the current CNB forecast, the growth of the Czech economy will remain above 3% in full-year terms both this year and in the years ahead. The increase in economic activity will be driven mainly by robust growth in household consumption and private and government investment. Fiscal policy will contribute to domestic demand growth via faster drawdown of EU funds and a significant rise in current expenditure. The contribution of net exports to economic growth will be temporarily negative this year. It will reflect the continuing growth of domestic demand and appreciation of the koruna assumed by the forecast.
Growth in economic activity comes in broadly in line with CNB forecast in 2018 Q2
The CNB comments on the GDP figures for 2018 Q2
According to the CZSO’s estimate released today, gross domestic product adjusted for price, seasonal and calendar effects rose by 2.4% year on year in 2018 Q2. In quarter-on-quarter terms, economic activity increased by 0.7%. The rate of economic growth is thus slackening temporarily in line with the CNB forecast, due to slowing growth in external demand combined with increasingly strong supply-side constraints on the domestic economy.
The economic growth recorded in 2018 Q2 was only slightly below the CNB forecast in both year-on-year and quarter-on-quarter terms. In contrast to the forecast, a negative contribution was recorded for change in inventories. However, it was almost fully offset by a less negative contribution of net exports. In line with the prediction, private consumption is continuing to grow robustly despite slowing somewhat. Growth in government consumption also slowed and was below the forecast. The forecast for fixed investment broadly materialised.
Overall, growth in economic activity slowed further from its previous high rates in 2018 Q2, in line with the forecast. According to the current CNB forecast, the growth of the Czech economy will remain above 3% in full-year terms both this year and in the years ahead. The increase in economic activity will be driven mainly by robust growth in household consumption and private and government investment. Fiscal policy will contribute to domestic demand growth via faster drawdown of EU funds and a significant rise in current expenditure. The contribution of net exports to economic growth will be temporarily negative this year. It will reflect the continuing growth of domestic demand and appreciation of the koruna assumed by the forecast.
Jan Brůha, Director of Economic Research Division