Czech second-quarter annual economic growth revised up to 2.7%

By bne IntelliNews August 29, 2014

The Czech economy expanded on an annual basis for the third straight quarter in Q2 2014 supported mainly by recovering domestic demand and expanding manufacturing sector. The statistics office released on August 29 detailed second-quarter data showing the country’s gross domestic product growing by 2.7% y/y, slightly up from the initial estimate of 2.6%. The growth eased from 2.9% y/y in Q1.

The economy stagnated on a quarterly basis in Q2, in line with the initial estimate and following a 0.8% q/q hike in the first three months.

The Czech economy is reviving from a record-long recession that ended in 2013. Recovery was aided by the central bank’s interventions on the currency market to weaken the koruna to stave off the threat of deflation and help exporters by making their products more competitive abroad. However foreign demand, which has been the main growth driver in previous years, weakened in recent months in line with a slowdown in western Europe, and in particular in Germany, the Czech Republic’s main trading partner. The country is yet to feel the impact of the Ukraine crisis which will put a drag on growth in the short-term.

Final consumption expenditure increased by 2% y/y in Q2 driven by a 2.3% y/y rise in government spending and by a 1.9% hike in household demand. Gross capital formation was by 10.8% higher than a year ago. External trade stopped being the main factor of the GDP formation in Q2 as imports increased by 11.3% y/y, while exports advanced 8.9% y/y.

On the supply side, activity increased in all sectors except for financial and insurance activities. The key manufacturing sector, which accounted for a third of the gross value added, expanded by 8.7% y/y with production of transport equipment being the main growth driver.

According to the latest forecast of the Czech finance ministry, the GDP should grow by 2.7% in 2014, recovering from a 0.9% drop in 2013. The central bank sees this year’s growth at 2.9%. The IMF’s forecast is for a 2.5% GDP growth, while both the European Commission and the World Bank see it at 2%.

Related Articles

Czech CPI buys huge Central European retail portfolio

Czech real estate investor CPI Group has bought a large portfolio of Central European retail assets, local media reported on January 17. The investor, which has grown its holdings rapidly since ... more

CEZ ignores Czech finance minister and re-elects CEO

The supervisory board at Czech power group CEZ ignored pressure from the finance ministry to dump the current management, local media report. Finance Minister Andrej Babis has been accumulating ... more

Japan’s Asahi buys a huge round in Central Europe

Asahi has beaten a host of regional heavyweights in the race to buy SABMiller’s Central and Eastern European beer brands, the Japanese brewer announced on December 13. The Asian giant said it ... more

Register here to continue reading this article and 2 more for free or purchase 12 months full website access including the bne Magazine for just $119/year.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

To continue viewing our content you need to complete the registration process.

Please look for an email that was sent to with the subject line "Confirmation bne IntelliNews access". This email will have instructions on how to complete registration process. Please check in your "Junk" folder in case this communication was misdirected in your email system.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

If you have any questions please contact us at sales@intellinews.com

Subscribe to bne IntelliNews website and magazine

Subscribe to bne IntelliNews website and monthly magazine, the leading source of business, economic and financial news and commentary in emerging markets.

Your subscription includes:
  • Full access to the bne content daily news and features on the website
  • Newsletters direct to your mailbox
  • Print and digital subscription to the monthly bne magazine
  • Digital subscription to the weekly bne newspaper

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

bne IntelliNews
$119 per year

All prices are in US dollars net of applicable taxes.

If you have any questions please contact us at sales@intellinews.com

Register for free to read bne IntelliNews Magazine. You'll receive a free digital subscription.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

IntelliNews Pro offers daily news updates delivered to your inbox and in-depth data reports.
Get the emerging markets newswire that financial professionals trust.

"No day starts for my team without IntelliNews Pro" — UBS

Thank-you for requesting an IntelliNews Pro trial. Our team will be in contact with you shortly.

Dismiss