Economic decline comes to a halt in line with CNB forecast
According to the CZSO’s estimate released today, GDP adjusted for price, seasonal and calendar effects dropped by 5.5% in year-on-year terms in 2009 Q2, while recording a slight increase of 0.1% in quarter-on-quarter terms. Compared to the CNB forecast, the reported annual GDP decline is 1 percentage point lower, whereas the quarter-on-quarter GDP developments are in line with the CNB’s assumptions. This reflects the revision made by the CZSO to the GDP time series from 2007 to 2009 Q1. It shows that last year, or 2009 Q1, saw a faster slowdown, or a sharper fall, in GDP growth than previously expected.
As regards the structure of economic activity, annual real growth in household and government consumption was higher than the CNB had expected. By contrast, gross capital formation recorded a dramatic fall, remaining far behind the CNB’s expectations owing to the evolution of fixed investment and particularly inventories. On the other hand, annual growth rates of exports and imports of goods and services declined less than expected, with exports recording a slight increase in quarter-on-quarter terms. As a result, the deterioration in net exports was somewhat more modest in year-on-year terms than assumed by the CNB.
The released data confirm the CNB’s view that the economic decline will come to a halt in Q2 and quarter-on-quarter growth in the Czech economy can be expected from Q3 onwards. However, the sharp fall in GDP observed at the start of the year will pass through to an annual decline in GDP in the remainder of the year.
Petr Vojtíšek, Deputy Executive Director, Monetary and Statistics Department
The CNB comments on the GDP figures for 2009 Q2
Economic decline comes to a halt in line with CNB forecast
According to the CZSO’s estimate released today, GDP adjusted for price, seasonal and calendar effects dropped by 5.5% in year-on-year terms in 2009 Q2, while recording a slight increase of 0.1% in quarter-on-quarter terms. Compared to the CNB forecast, the reported annual GDP decline is 1 percentage point lower, whereas the quarter-on-quarter GDP developments are in line with the CNB’s assumptions. This reflects the revision made by the CZSO to the GDP time series from 2007 to 2009 Q1. It shows that last year, or 2009 Q1, saw a faster slowdown, or a sharper fall, in GDP growth than previously expected.
As regards the structure of economic activity, annual real growth in household and government consumption was higher than the CNB had expected. By contrast, gross capital formation recorded a dramatic fall, remaining far behind the CNB’s expectations owing to the evolution of fixed investment and particularly inventories. On the other hand, annual growth rates of exports and imports of goods and services declined less than expected, with exports recording a slight increase in quarter-on-quarter terms. As a result, the deterioration in net exports was somewhat more modest in year-on-year terms than assumed by the CNB.
The released data confirm the CNB’s view that the economic decline will come to a halt in Q2 and quarter-on-quarter growth in the Czech economy can be expected from Q3 onwards. However, the sharp fall in GDP observed at the start of the year will pass through to an annual decline in GDP in the remainder of the year.
Petr Vojtíšek, Deputy Executive Director, Monetary and Statistics Department