According to the CZSO's preliminary estimate, real GDP grew by 6.2% year on year in 2006 Q2,
while the annual growth for Q1 was revised downwards to 7.1%. The seasonally adjusted
quarter-on-quarter GDP growth was 1.2%.
The published data are lower than predicted in the CNB's July forecast. In year-on-year terms,
the difference is 1 percentage point. Quarter-on-quarter growth, which is more important as regards
assessing the current development of the economy, showed a deviation of 0.2 percentage point from
the forecast. The CNB had forecasted a gradual slowdown in economic growth over the coming few
quarters from the previous record-high growth rates, but the actual downturn was more
pronounced.
Growth in exports and imports of goods and services was somewhat lower than forecasted, as was
the overall contribution of foreign trade to GDP growth. Slower growth was also recorded for fixed
investment, although this may have been due to a large volume of work in progress in some
investment projects, leading to an unexpectedly large increase in inventory investment. The annual
fall in government consumption had also not been expected by the forecast. By contrast, household
consumption was slightly higher than forecasted.
On the value added side, manufacturing is still recording extraordinarily fast growth. This
confirms that the rapid economic growth is still largely due to changes on the supply side of the
economy, in particular new facilities in export-oriented industries. However, some services
industries, particularly wholesale and retail trade, also contributed significantly to the GDP
growth.
A less favourable aspect of the economic growth remains the deteriorating terms of trade, caused
by falling prices of Czech exports without a proportionate fall in import prices. The extent of
this deterioration, however, is decreasing. As a result, real gross domestic income growth held
steady around 5%, i.e. it is not showing a similar downward trend to GDP growth. The moderation of
the unfavourable terms of trade also resulted in a pick-up in the overall GDP deflator to 1.4% year
on year, while the deflators of the components of domestic demand were stable.
Tomáš Holub
Executive Director, Monetary and Statistics Department
The CNB comments on the GDP figures for 2006 Q2
Growth eases faster than forecasted by the CNB
According to the CZSO's preliminary estimate, real GDP grew by 6.2% year on year in 2006 Q2, while the annual growth for Q1 was revised downwards to 7.1%. The seasonally adjusted quarter-on-quarter GDP growth was 1.2%.
The published data are lower than predicted in the CNB's July forecast. In year-on-year terms, the difference is 1 percentage point. Quarter-on-quarter growth, which is more important as regards assessing the current development of the economy, showed a deviation of 0.2 percentage point from the forecast. The CNB had forecasted a gradual slowdown in economic growth over the coming few quarters from the previous record-high growth rates, but the actual downturn was more pronounced.
Growth in exports and imports of goods and services was somewhat lower than forecasted, as was the overall contribution of foreign trade to GDP growth. Slower growth was also recorded for fixed investment, although this may have been due to a large volume of work in progress in some investment projects, leading to an unexpectedly large increase in inventory investment. The annual fall in government consumption had also not been expected by the forecast. By contrast, household consumption was slightly higher than forecasted.
On the value added side, manufacturing is still recording extraordinarily fast growth. This confirms that the rapid economic growth is still largely due to changes on the supply side of the economy, in particular new facilities in export-oriented industries. However, some services industries, particularly wholesale and retail trade, also contributed significantly to the GDP growth.
A less favourable aspect of the economic growth remains the deteriorating terms of trade, caused by falling prices of Czech exports without a proportionate fall in import prices. The extent of this deterioration, however, is decreasing. As a result, real gross domestic income growth held steady around 5%, i.e. it is not showing a similar downward trend to GDP growth. The moderation of the unfavourable terms of trade also resulted in a pick-up in the overall GDP deflator to 1.4% year on year, while the deflators of the components of domestic demand were stable.
Tomáš Holub
Executive Director, Monetary and Statistics Department