Czech GDP up by 2.8% in 2018, a y/y slowdown due to its overheating and weak Eurozone

Czech GDP up by 2.8% in 2018, a y/y slowdown due to its overheating and weak Eurozone
Czech economic growth slowed in 3Q18 year-on-year and 0.6% quarter-on-quarter, according to the Czech Statistics Office
By bne IntelliNews January 15, 2019

Czech economy grew by 2.4% in 3Q18 year-on-year and 0.6% quarter-on-quarter, according to the Czech Statistics Office data released on January 11.  

The reason for the expected slowdown in GDP growth from 4.5% in 2017 is the high comparative base, the fact that the Czech economy is operating above its potential, and weaker economic growth in Eurozone, according to Generali Investments CEE chief economist Radomir Jac, daily Aktualne.cz reported.

According to seasonally adjusted data, the total of monetary and non-monetary income of households rose in real terms by 1.4% q/q (by 2.8% y/y), the real consumption per capita by 1.6% q/q (2.2% y/y).

The saving rate went down by 0.2 percentage point (pp). The investment rate of non-financial corporations also slightly decreased by 0.3 pp q/q. Average monthly income of households per capita in nominal terms reached CZK26,442 (€1,034); average monthly consumption then CZK24,533 (€959.8).

Average monthly income from employment amounted at CZK32,439 (€1,269) in 3Q18, up in real terms by 1% q/q and 6.1% y/y. The profit rate in 3Q18 reached 46.8%, down by 0.1pp q/q and by 2.9pp y/y. Total labour costs of non-financial corporations grew by 8.5% y/y.

“Compared to Poland, Hungary and Slovakia, Czech economic growth was rather modest. However, taking into account unfavourable situation in Germany in 3Q18, we can evaluate performance of the domestic economy as relatively decent. This year the economy should slow down to 2.7%,” said Komercni banka´s Economist Viktor Zeisel.

Data

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