The Czech economy grew by 0.8% on the quarter and by 2.9% on the year in the first quarter of 2014, the latest figures by the statistics office showed on July 1. The figures were revised up from a 0.4% quarterly and a 2.5% annual hike reported on June 4.
The economy is reviving from a record-long recession that ended in 2013. The recovery is aided by rising demand for Czech products abroad, mainly in the euro zone, the country’s main trading partner. Improving domestic demand is also supporting growth. The low prior-year base also played a role, the statistics office said. In Q1 the gross domestic product grew for the fourth straight quarter but eased from a 1.5% hike in Q4. On an annual basis, however, the growth strengthened from 1.1% in Q4 and was the strongest since Q1 2011.
Final consumption expenditure increased by 1.5% y/y in Q1 driven by a 1.4% y/y rise in government spending and by a 1.5% hike in household demand. Gross capital formation was by 3.4% higher than a year ago and it registered its first annual rise after declining in the previous 10 quarters. Exports increased by 10.1% y/y and imports by 9.5% y/y in the first quarter of the year.
On the supply side, activity increased in all sectors except for financial and insurance activities. The key manufacturing sector, which contributed more than half to the gross value added growth, expanded by 5.9% 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 1.7% in 2014, recovering from a 0.9% drop in 2013. The central bank sees this year’s growth at 2.6%. Earlier this week, the IMF improved its growth outlook for the Czech economy to 2.5% from 1.9%. Both the European Commission and the World Bank see the Czech 2014 GDP growth at 2%.
|Q1 Gross domestic product, total||2,9||0,8|
|Agriculture, forestry and fishing||2,5||8,4|
|Trade, hotels, restaurants, transport||1,8||2,1|
|Information and communication||1,8||0,0|
|Financial and insurance activities||-2,2||-2,0|
|Real estate activities||3,5||5,1|
|Professional, scientific, technical and administrative activities||3,1||2,7|
|Public administration, education, health and social work||2,3||1,0|
|Other service activities||1,6||4,2|
|Gross value added, total||2,8||1,1|
|Taxes minus subsidies on products||4,2||-2,1|
|Final consumption expenditure||1,5||1,4|
|Gross capital formation||3,4||-3,4|
|Source: Czech stats office: data adjusted for seasonal and calendar effects|
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