Czech c-bank worsens 2013 economic outlook, expects GDP contraction.

By bne IntelliNews February 7, 2013
The Czech central bank expects the economy to contract by 0.3% y/y in 2013 after shrinking by 1% in 2012, the bank said in a newly-released forecast. In its previous forecast published in November the bank was expecting the GDP to fall by 0.1% in 2012 but return to a growth of 0.2% this year. The downgrade reflects the weak domestic consumption curbed by the government's budget consolidation measures as well as the slowing foreign demand, the sole GDP growth driver. Yet for 2014 the bank is a bit more optimistic as it improved its growth outlook to 2.1% from 1.4%. Central bank governor Miroslav Singer said the risks to the forecast are balanced and somewhat lower than in November, CTK news agency reported. The Czech economy contracted for the third straight quarter in Q3 and the latest industry data suggest it probably stayed in recession in the last quarter of 2012. On Jan 31, the finance ministry also cut its GDP outlook for 2012 and 2013 forecasting a 1.1% contraction for 2012 and a 0.1% growth for this year.

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