According to the CZSO’s estimate released today, real gross domestic product adjusted for price, seasonal and calendar effects went up by 0.6% year on year in 2024 Q2. Compared with the previous quarter, economic activity increased by 0.3%. The new data indicate that the Czech economy is recovering in line with the CNB’s summer forecast overall.
The annual real GDP growth in 2024 Q2 was in line with the CNB’s expectations. The slightly lower quarter-on-quarter growth in Q2 was offset by faster growth at the start of this year. In year-on-year terms, household consumption and the contribution of net exports developed in line with the forecast in Q2. Fixed investment returned to year-on-year growth unexpectedly early. However, this was counteracted by a deeper-than-expected decline in change in inventories. As a result, overall investment activity decreased slightly more than forecasted. Conversely, general government consumption was well above the forecast.
2024 Q2
year-on-year in %
actual figure
MPR Summer 2024
Gross domestic product
0.6
0.6
Household consumption
1.1
1.1
General government consumption
4.3
3.0
Gross fixed capital formation
0.7
-1.5
Change in inventories (in p. p.)
-2.2
-1.5
Exports of goods and services
0.4
1.3
Imports of goods and services
-1.5
-0.7
Net exports (in p. p.)
1.3
1.3
prices of 2020 (chain-linked), seasonally adjusted
The CNB’s summer forecast expects economic activity to increase by 1.2% this year. Inflation close to the CNB’s 2% inflation target amid steady nominal wage growth will foster growth in consumers’ purchasing power. This, together with a decline in the saving rate, will lead to a recovery in household consumption. The forecast expects quarterly growth in private fixed investment amid falling domestic and foreign interest rates. In addition, the contribution of inventories to the annual GDP growth will turn positive again next year. The growth of the Czech economy is dampened this year by the consolidation package, which causes fiscal policy to be restrictive. External demand will start to pick up gradually as Germany’s current economic problems gradually fade. The expected upturn in domestic economic growth to close to 3% in 2025 will be based on domestic demand, above all households’ consumption expenditure and gross capital formation.
Jakub Matějů, Deputy Executive Director, Monetary Department
Real GDP in line with the CNB forecast in 2024 Q2
The CNB comments on the GDP figures for 2024 Q2
According to the CZSO’s estimate released today, real gross domestic product adjusted for price, seasonal and calendar effects went up by 0.6% year on year in 2024 Q2. Compared with the previous quarter, economic activity increased by 0.3%. The new data indicate that the Czech economy is recovering in line with the CNB’s summer forecast overall.
The annual real GDP growth in 2024 Q2 was in line with the CNB’s expectations. The slightly lower quarter-on-quarter growth in Q2 was offset by faster growth at the start of this year. In year-on-year terms, household consumption and the contribution of net exports developed in line with the forecast in Q2. Fixed investment returned to year-on-year growth unexpectedly early. However, this was counteracted by a deeper-than-expected decline in change in inventories. As a result, overall investment activity decreased slightly more than forecasted. Conversely, general government consumption was well above the forecast.
prices of 2020 (chain-linked), seasonally adjusted
The CNB’s summer forecast expects economic activity to increase by 1.2% this year. Inflation close to the CNB’s 2% inflation target amid steady nominal wage growth will foster growth in consumers’ purchasing power. This, together with a decline in the saving rate, will lead to a recovery in household consumption. The forecast expects quarterly growth in private fixed investment amid falling domestic and foreign interest rates. In addition, the contribution of inventories to the annual GDP growth will turn positive again next year. The growth of the Czech economy is dampened this year by the consolidation package, which causes fiscal policy to be restrictive. External demand will start to pick up gradually as Germany’s current economic problems gradually fade. The expected upturn in domestic economic growth to close to 3% in 2025 will be based on domestic demand, above all households’ consumption expenditure and gross capital formation.
Jakub Matějů, Deputy Executive Director, Monetary Department