Economic policy / Macroeconomic Indicators, Economic Growth
This section reports on economic policy initiatives of the Czech government, the EU, and other entities that have a direct impact on the competitiveness of the country. It also includes information on economic priorities of the AmCham and other leading associations.
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Spotlight issue
Inflation dropped to this year’s minimum in March
March’s inflation decelerated by a tick in line with our expectations and is currently half of a percentage point below the CNB forecast. The reason is mainly lower food price dynamics as well as a drop in fuel prices. Although the unemployment statistics indicate a record tightness on the labour market, core inflation decelerated slightly. Year-on-year inflation dropped to this year’s low and should reach the 2% CNB target this summer.
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GDP revision moves all-year 2017 growth to 4.6%
The Czech Statistical Office (CZSO) revised the GDP statistics for 4Q17. Qoq growth was adjusted to 0.8% (from originally 0.5%) and yoy to 5.5%. The all-year growth in 2017 thus reached 4.6%. The revision was made mainly on the back higher government expenditures compared with previous estimates. The investments were also revised slightly up, but the move was offset by a downward revision of inventories. Besides government consumption, growth in 4Q was driven by all items of domestic demand. External trade contributed slightly negatively. Private consumption and investment activity were the main growth drivers, contributing roughly 2pp each. The inventory built increased significantly and added another percentage point. On the supply side, we see two dominant drivers. The value added in industry increased 7.4% while private services grew 6.3%. These two components thus created a major part of the GDP dynamics.
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