The economy of the region grew quarter-on-quarter similar to the end of the previous year. In the last quarter of 2023, the Czech economy grew by 0.4 percent quarter-on-quarter, and by 0.2 percent year-on-year.
Total income for final consumption and the growing balance of foreign trade contributed to the intermediate growth. On the contrary, the decline in gross capital formation continued, comments Vladimr Kermiet, editor of the Department of National Statistics, on the first estimate of statistics. The estimate will not be published today with details of the GDP development.
Real estate is the driving force of the economy, according to Raiffeisenbank analysts. Household consumption is covered by the growth of real wages from 2022 onwards. the Czech economy is now out of the recession it was in for half of the previous year, please explain in your comment.
In this way, companies invite investment activity. For years, the rates are therefore relatively high, but the progress outside the profit margins helped to create own capital for investment, added David Marek, chief economist of the Deloitte company.
Unattainable pre-covid year
However, the domestic economy did not manage to cope with the pre-covid crisis. The domestic economy has been growing for two consecutive quarters, but together with Finland, it is the only one in the EU that has not yet reached the pre-pandemic level of GDP from the end of 2019, explains Jakub Seidler, chief economist of the Czech Banking Association.
According to him, the reason is the decline in household consumption, which has depressed the economy in recent years. This is mainly due to the fact that the drop in real wages was among the worst in the Czech Republic. However, they can play a role here and give effects, for example, purchases of housing abroad, which were not sufficiently captured in official hearings, as well as a hike in the economy, the economist explains.
Analysts do not expect that household consumption will grow this year and will affect the Czech economy throughout the year. According to SOB analyst Dominik Rusinka, full-year GDP growth should reach 1.5 percent after a slight decline of 0.2 percent, while Komern banka forecasts an average growth of 1.4 percent. In its April forecast, the Ministry of Finance estimated economic growth of 1.4 percent this year, but the National Bank will publish its new forecast on Thursday, when it decides on multi-year rates.
