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Czech Republic: Recession Not Managed Yet

Published: November 15, 2013; 18:30 · (Vindobona)

The GDP decrease is expected to reach 1.6% this year. The downward trend decelerates, however.

Czech Republic: Recession Not Managed Yet / Picture: © Flickr

According to the preliminary estimate of the Czech Statistical Office, the gross domestic product adjusted for price, seasonal, and calendar effects decreased in the Q3 2013 by 1.6%, year-on-year; in the quarter-on-quarter comparison it was by 0.5%.

In the Q3 2013 the gross domestic product (GDP) adjusted for price effects and seasonally adjusted*/ decreased both in the year-on-year (-1.6%) as well as in the quarter-on-quarter (-0.5%) comparison, according to the preliminary estimate. In the total for the nine months, the GDP was by 1.8% lower compared to the corresponding period of the previous year. 

Differentiated development of seasonally adjusted and seasonally unadjusted GDP was markedly influenced by the different number of working days (the Q3 2013 had 3 working days more than the Q3 2012). When this influence is not taken into account, the y-o-y GDP drop would be only 0.7%, while in comparison to the Q2 2013 the GDP would increase by 0.4%. 

The deepening GDP drop was a consequence of a negative development of two of the three fundamental components of the total demand. The gross fixed capital formation further decreased as a result of weak investment activity not only of construction character. In the external trade, exports of goods increased by 1.2%, y-o-y; however, imports were higher by 2.7% and thus the positive balance decreased in the Q3 both in the y-o-y and q-o-q comparison. The final consumption expenditure remained roughly on the level of the Q3 2012. 

The supply side of the economy developed in a differentiated way. The gross value added generation decreased both in the y-o-y and q-o-q comparison mainly in the following CZ-NACE activities: energy, construction, trade, transport, and agriculture. On the contrary, a positive contribution came from manufacturing and, within that, especially manufacture of transport equipment.