The data on year-on-year growth in GDP in 1999 Q4 (1.0%) indicate that the economic recovery has
not been as marked as some predictions had indicated. The quarter-on-quarter decline in seasonally
adjusted GDP accompanied by the growth in seasonally adjusted domestic demand confirms that the
room is still limited for a pick-up in economic growth in the current Czech economy, with its
persisting structural and institutional problems. The GDP results announced for Q4 are in line with
CNB projections, and closer to their lower margin. We therefore have no reason to change the
current forecast for the year 2000. All the information and analyses indicate that in 2000 only
gradual growth can be expected, with domestic demand remaining fairly weak and the relationship
between domestic demand and the foreign trade balance largely unchanged. Our GDP estimate for 2000
is still for year-on-year growth within the 0.0%-2.0% range, with a midpoint of approximately 1%. A
deviation from this forecast could occur if there was a major upturn in investment. This, however,
would feed through more into an increase in external imbalance than into an upturn in economic
growth.
The GDP results
The data on year-on-year growth in GDP in 1999 Q4 (1.0%) indicate that the economic recovery has not been as marked as some predictions had indicated. The quarter-on-quarter decline in seasonally adjusted GDP accompanied by the growth in seasonally adjusted domestic demand confirms that the room is still limited for a pick-up in economic growth in the current Czech economy, with its persisting structural and institutional problems. The GDP results announced for Q4 are in line with CNB projections, and closer to their lower margin. We therefore have no reason to change the current forecast for the year 2000. All the information and analyses indicate that in 2000 only gradual growth can be expected, with domestic demand remaining fairly weak and the relationship between domestic demand and the foreign trade balance largely unchanged. Our GDP estimate for 2000 is still for year-on-year growth within the 0.0%-2.0% range, with a midpoint of approximately 1%. A deviation from this forecast could occur if there was a major upturn in investment. This, however, would feed through more into an increase in external imbalance than into an upturn in economic growth.
Milan Tománek
CNB spokesman