Economy declines faster than forecasted by the CNB
According to the CZSO’s estimate released today, GDP adjusted for price, seasonal and calendar effects rose by 0.7% year on year in 2008 Q4. In quarter on quarter terms, it shrank by 0.9%, the first decline recorded since 1998. In 2008 as a whole, annual GDP growth was 3.1%.
The above quarter-on-quarter seasonally adjusted decline in real GDP in 2008 Q4 suggests a more pronounced onset of the economic downturn phase compared to the CNB’s forecast, which had assumed a stagnation of the economy in 2008 Q4. At the same time, the CZSO modified the method for the adjustment of GDP for calendar effects. The newly published time series shows a significant slowdown in both the quarter-on-quarter and year-on-year GDP growth rates as early as 2008 Q3. Owing to these two factors, the reported annual growth in 2008 Q4 (0.7%) was 1.3 percentage points lower than the current CNB forecast (2%).
As regards the structure of economic growth, real growth in household consumption was consistent with CNB’s expectations. However, deviations from the CNB’s forecast were recorded in the other demand components. Although it had been expected to grow somewhat, government consumption recorded a slight decline. By contrast, gross capital formation exceeded the CNB’s expectations, due to the evolution of inventories. The growth rates of both exports and imports of goods and services fell to significantly negative values, while the CNB had expected foreign trade turnover to be broadly flat. Net exports recorded a marked year-on-year deterioration in 2008 Q4, whereas the CNB’s forecast had expected only a pronounced slowdown in its annual improvement. The fall in global demand thus affected the Czech economy faster and more significantly than expected by the forecast.
Gross value added at constant prices rose by 1.1% year on year. This was mainly due to agriculture (where, however, value added at current prices remained flat due to a sharp decline in prices) and trade and repair of motor vehicles and consumer goods. By contrast, a decline in gross value added was recorded in manufacturing, business services and financial intermediation and insurance.
Tomáš Holub, Executive Director, Monetary and Statistics Department
The CNB comments on the GDP figures for 2008 Q4
Economy declines faster than forecasted by the CNB
According to the CZSO’s estimate released today, GDP adjusted for price, seasonal and calendar effects rose by 0.7% year on year in 2008 Q4. In quarter on quarter terms, it shrank by 0.9%, the first decline recorded since 1998. In 2008 as a whole, annual GDP growth was 3.1%.
The above quarter-on-quarter seasonally adjusted decline in real GDP in 2008 Q4 suggests a more pronounced onset of the economic downturn phase compared to the CNB’s forecast, which had assumed a stagnation of the economy in 2008 Q4. At the same time, the CZSO modified the method for the adjustment of GDP for calendar effects. The newly published time series shows a significant slowdown in both the quarter-on-quarter and year-on-year GDP growth rates as early as 2008 Q3. Owing to these two factors, the reported annual growth in 2008 Q4 (0.7%) was 1.3 percentage points lower than the current CNB forecast (2%).
As regards the structure of economic growth, real growth in household consumption was consistent with CNB’s expectations. However, deviations from the CNB’s forecast were recorded in the other demand components. Although it had been expected to grow somewhat, government consumption recorded a slight decline. By contrast, gross capital formation exceeded the CNB’s expectations, due to the evolution of inventories. The growth rates of both exports and imports of goods and services fell to significantly negative values, while the CNB had expected foreign trade turnover to be broadly flat. Net exports recorded a marked year-on-year deterioration in 2008 Q4, whereas the CNB’s forecast had expected only a pronounced slowdown in its annual improvement. The fall in global demand thus affected the Czech economy faster and more significantly than expected by the forecast.
Gross value added at constant prices rose by 1.1% year on year. This was mainly due to agriculture (where, however, value added at current prices remained flat due to a sharp decline in prices) and trade and repair of motor vehicles and consumer goods. By contrast, a decline in gross value added was recorded in manufacturing, business services and financial intermediation and insurance.
Tomáš Holub, Executive Director, Monetary and Statistics Department