GDP grew by 0.4% year-on-year in the 1st quarter, analysts perceive a recovery

Commercial presentation Update: 04/30/2024 2:20 p.m
Issued by: 30/04/2024, 09:12

Prague – In the first quarter of this year, the Czech economy grew by 0.4 percent year-on-year, compared to the previous quarter, the gross domestic product (GDP) increased by 0.5 percent. The preliminary estimate was published today by the Czech Statistical Office (ČSÚ). According to statistics, domestic consumption mainly contributed to the growth. According to analysts, the published data show that the Czech economy is starting to revive. According to them, in the second quarter, the Czech Republic could surpass the level before the covid-19 pandemic, and GDP could increase by 1.5 percent for the whole year.

“Total spending on final consumption and a growing balance of foreign trade contributed to year-on-year growth. On the contrary, gross capital formation continued to decline,” said Vladimír Kermiet, director of the National Accounts Department of the CZSO. Quarter-on-quarter growth was supported by domestic demand, driven by higher household spending and gross capital formation.

“The long-awaited economic recovery is apparently becoming a reality. Czech households were evidently waiting for the hot phase of the inflationary crisis to pass, they renewed their shattered confidence in a bright tomorrow and began to spend more,” Cyrrus Chief Economist Vít Hradil told ČTK. According to him, if there is no further shock that would affect Czech consumers, there is a good chance that the economy will continue to rise in the coming quarters.

UniCredit Bank Chief Economist Pavel Sobíšek pointed out that the quarter-on-quarter growth was the strongest in the last eight quarters. “Therefore, the Czech economy last achieved a better result before the inflationary wave and during the opening of economies after the covid fast. The result means that the Czech economy has finally embarked on the path of a more tangible recovery. Its performance came close to the pre-covid state at only 0.2 percent, so there is a good chance that it will be overcome already in the second quarter of this year,” he said.

Analysts pointed out that the Czech economy may be hampered this year by the weak economic growth of the German economy. According to today’s data from the Federal Statistical Office, German GDP after price and calendar adjustment fell by 0.2 percent year-on-year in the first quarter, and rose by 0.2 percent quarter-on-quarter. According to Eurostat data, the economy of the European Union grew by 0.5 percent year-on-year in the first quarter, and by 0.3 percent quarter-on-quarter.

Overall, according to analysts, today’s CZSO data show that the Czech economy is recovering and returning to economic growth after last year’s decline of 0.2 percent. “For the whole of this year, the Czech economy is probably headed for a growth of over one percent, while, if the European industrial sector wises up in the meantime, a value close to 1.5 percent seems achievable,” concluded Hradil.

CR GDP economy 1st quarter AUDIO GRAPHICS CZSO OPENER