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
Industry is unstoppable when creating value added
The Czech Statistical Office (CZSO) confirmed its preliminary estimate of domestic GDP growth at 0.5% qoq and 5.0% yoy. The favourable dynamics were mainly thanks to private consumption, which increased 0.9% qoq (+4.4% yoy). Households benefit from a low unemployment rate, which improves its low every month, and sound wage growth. Moreover, consumers remain optimistic as there are no signs that the good times will come to an end anytime soon. This is also mirrored in investment activity. Businesses adjust to growing demand for output amid a stretched labour market, where it is almost impossible to find a suitable work force. Thus, they invest in a way that they do not have to hire too many personnel for their new facilities or they can free up some labour force when renewing existing facilities. Investment has thus remained at a sound level from the second quarter. In yoy terms, investment growth prints at 7.5%. Moreover, it seems there is more unfinished investment as inventory built contributed 1pp to overall GDP growth.
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European Semester Autumn 2017 report: Czech Republic: 2017 is set to mark the beginning of an investment rebound
The Czech economy continues to grow steadily. GDP growth is forecast to be well above potential in 2017 due to buoyant investment and private consumption, but is expected to moderate in 2018 and 2019. 2017 is set to mark the beginning of an investment rebound following the previous year’s slump, the report says. But adds that swift growth risks draining labour market.
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GDP deceleration in 3Q17 was less pronounced than the market feared
According to Komercni banka, Czech GDP increased 0.5% qoq in 3Q17 according to the flash estimate of the Czech Statistical Office (CZSO). This represents a significant deceleration after the 2.5% recorded in 2Q. Yoy growth in the third quarter printed a strong 5%.
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