Annual growth in economic activity comes in significantly above CNB forecast
According to the CZSO’s estimate released today, GDP adjusted for price, seasonal and calendar effects rose by 4.4% year on year in 2015 Q2. Economic activity in quarter-on-quarter terms increased by 1.0%. Compared to the CNB forecast, the reported increase in economic activity in 2015 Q2 is 1 percentage point higher in year-on-year terms and 1.1 percentage points higher in quarter-on-quarter terms.
The upward deviation of annual GDP growth in 2015 Q2 from the CNB forecast was due to higher-than-expected investment, especially higher additions to inventories. The forecast assumption of a partial correction of robust growth in inventories in 2015 Q1 thus failed to materialise. Government consumption was also slightly higher than forecasted. By contrast, household consumption growth was slightly lower than in the forecast. The growth rates of both exports and imports of goods and services were more than 1 percentage point lower than the forecast. The contribution of net exports to GDP growth was slightly lower compared to the CNB forecast.
Overall, the outcome exceeded the expectations of the CNB but the deviation is concentrated in inventories, which are a highly volatile GDP component. The other GDP components are developing approximately in line with the forecast. According to the CNB forecast, the economy will continue to grow this year. Accelerating external demand, low oil prices, easy domestic monetary conditions via the weakened koruna and exceptionally low interest rates, and a rise in government investment will lead to GDP growth of 3.8% this year according to the forecast. Growth will then slow slightly below 3% in the next two years.
Tomáš Holub, Executive Director, Monetary Department
The CNB comments on the GDP figures for 2015 Q2
Annual growth in economic activity comes in significantly above CNB forecast
According to the CZSO’s estimate released today, GDP adjusted for price, seasonal and calendar effects rose by 4.4% year on year in 2015 Q2. Economic activity in quarter-on-quarter terms increased by 1.0%. Compared to the CNB forecast, the reported increase in economic activity in 2015 Q2 is 1 percentage point higher in year-on-year terms and 1.1 percentage points higher in quarter-on-quarter terms.
The upward deviation of annual GDP growth in 2015 Q2 from the CNB forecast was due to higher-than-expected investment, especially higher additions to inventories. The forecast assumption of a partial correction of robust growth in inventories in 2015 Q1 thus failed to materialise. Government consumption was also slightly higher than forecasted. By contrast, household consumption growth was slightly lower than in the forecast. The growth rates of both exports and imports of goods and services were more than 1 percentage point lower than the forecast. The contribution of net exports to GDP growth was slightly lower compared to the CNB forecast.
Overall, the outcome exceeded the expectations of the CNB but the deviation is concentrated in inventories, which are a highly volatile GDP component. The other GDP components are developing approximately in line with the forecast. According to the CNB forecast, the economy will continue to grow this year. Accelerating external demand, low oil prices, easy domestic monetary conditions via the weakened koruna and exceptionally low interest rates, and a rise in government investment will lead to GDP growth of 3.8% this year according to the forecast. Growth will then slow slightly below 3% in the next two years.
Tomáš Holub, Executive Director, Monetary Department