Real GDP comes in slightly below the CNB forecast in 2024 Q1
The CNB comments on the GDP figures for 2024 Q1
According to the CZSO’s estimate released today, real gross domestic product adjusted for price, seasonal and calendar effects went up by 0.2% year on year in 2024 Q1. Compared with the previous quarter, economic activity increased by 0.3%. The new data indicate that the recovery of the Czech economy is only slightly slower than in the CNB’s spring forecast.
The annual real GDP growth in 2024 Q1 was slightly lower than the CNB had expected. This was due to a surprising drop in fixed investment, whereas the forecast had predicted its solid growth. Conversely, the other GDP components were more or less above the forecast. Households enjoyed renewed growth in real wages and increased their consumption. General government consumption was also higher than forecasted. After a significant drop in inventories at the end of last year, their contribution has turned positive again in line with expectations. However, it was much lower than in the same period a year earlier, while the resulting negative contribution of inventories to annual GDP growth was somewhat more moderate than expected in the forecast. Net exports also contributed slightly more to the growth in economic activity compared to the forecast, with higher dynamics observed in both exports and imports.
2024 Q1
year-on-year in %
actual figure
MPR Spring 2024
Gross domestic product
0.2
0.3
Household consumption
2.1
1.8
General government consumption
3.5
3.0
Gross fixed capital formation
-2.7
6.1
Change in inventories (in p. p.)
-3.4
-3.7
Exports of goods and services
2.5
-0.7
Imports of goods and services
-1.1
-2.6
Net exports (in p. p.)
2.7
1.2
constant prices, seasonally adjusted
The CNB’s spring forecast expects economic activity to increase by 1.4% this year. Inflation close to the CNB’s 2% inflation target amid solid nominal wage growth will support growth in households’ purchasing power. This, together with a decline in the saving rate, will lead to a recovery in their real consumption. The forecast expects growth in private fixed investment to increase amid falling domestic and, later, foreign interest rates. In addition, change in inventories will stabilise. However, the recovery of the Czech economy is dampened this year by the consolidation package, which causes fiscal policy to be restrictive. Conversely, external demand will start to pick up gradually as Germany’s current economic problems gradually fade. The expected upturn in domestic economic growth towards 3% in 2025 will be based mainly on domestic demand, above all consumption expenditure by households and gross capital formation.
Petr Král, Executive Director, Monetary Department
Real GDP comes in slightly below the CNB forecast in 2024 Q1
The CNB comments on the GDP figures for 2024 Q1
According to the CZSO’s estimate released today, real gross domestic product adjusted for price, seasonal and calendar effects went up by 0.2% year on year in 2024 Q1. Compared with the previous quarter, economic activity increased by 0.3%. The new data indicate that the recovery of the Czech economy is only slightly slower than in the CNB’s spring forecast.
The annual real GDP growth in 2024 Q1 was slightly lower than the CNB had expected. This was due to a surprising drop in fixed investment, whereas the forecast had predicted its solid growth. Conversely, the other GDP components were more or less above the forecast. Households enjoyed renewed growth in real wages and increased their consumption. General government consumption was also higher than forecasted. After a significant drop in inventories at the end of last year, their contribution has turned positive again in line with expectations. However, it was much lower than in the same period a year earlier, while the resulting negative contribution of inventories to annual GDP growth was somewhat more moderate than expected in the forecast. Net exports also contributed slightly more to the growth in economic activity compared to the forecast, with higher dynamics observed in both exports and imports.
constant prices, seasonally adjusted
The CNB’s spring forecast expects economic activity to increase by 1.4% this year. Inflation close to the CNB’s 2% inflation target amid solid nominal wage growth will support growth in households’ purchasing power. This, together with a decline in the saving rate, will lead to a recovery in their real consumption. The forecast expects growth in private fixed investment to increase amid falling domestic and, later, foreign interest rates. In addition, change in inventories will stabilise. However, the recovery of the Czech economy is dampened this year by the consolidation package, which causes fiscal policy to be restrictive. Conversely, external demand will start to pick up gradually as Germany’s current economic problems gradually fade. The expected upturn in domestic economic growth towards 3% in 2025 will be based mainly on domestic demand, above all consumption expenditure by households and gross capital formation.
Petr Král, Executive Director, Monetary Department