According to preliminary CZSO estimates, annual real GDP growth was 7.4% in 2006 Q1, the highest
rise since 1995. This figure was in line with the CNB's forecast, which had expected a pick-up in
GDP growth. GDP developments were greatly affected by faster value added growth in
manufacturing.
The structure of domestic demand was also in line with the forecast. Investment spending and
private consumption growth was much stronger than in the previous year. The growth rate of private
consumption was slightly higher than forecasted. By contrast, government consumption showed a
year-on-year decrease. In line with CNB expectations was also a decline in the positive
contribution of foreign trade to GDP growth, although the growth of domestic exports was stronger
than forecasted. Despite a modest pick-up in household consumption the evolution of GDP and its
components has not yet created any sizeable inflationary pressures.
As in the previous year, the trend of terms of trade deterioration, generated by a decline in
export prices and a modest rise in import prices, continued. Owing to the unfavourable evolution
of foreign trade prices the real gross domestic income growth (+5.5%) was lower than GDP
growth.
Petr Vojtíšek, Deputy Executive Director, Monetary and Statistics Department
The CNB comments on the GDP figures for 2006 Q1
Economic growth in line with CNB forecast
According to preliminary CZSO estimates, annual real GDP growth was 7.4% in 2006 Q1, the highest rise since 1995. This figure was in line with the CNB's forecast, which had expected a pick-up in GDP growth. GDP developments were greatly affected by faster value added growth in manufacturing.
The structure of domestic demand was also in line with the forecast. Investment spending and private consumption growth was much stronger than in the previous year. The growth rate of private consumption was slightly higher than forecasted. By contrast, government consumption showed a year-on-year decrease. In line with CNB expectations was also a decline in the positive contribution of foreign trade to GDP growth, although the growth of domestic exports was stronger than forecasted. Despite a modest pick-up in household consumption the evolution of GDP and its components has not yet created any sizeable inflationary pressures.
As in the previous year, the trend of terms of trade deterioration, generated by a decline in export prices and a modest rise in import prices, continued. Owing to the unfavourable evolution of foreign trade prices the real gross domestic income growth (+5.5%) was lower than GDP growth.
Petr Vojtíšek, Deputy Executive Director, Monetary and Statistics Department