E&Y slightly improves Czech 2014 GDP growth estimate to 2.6%

By bne IntelliNews June 19, 2014

The Czech economy should recover in 2014 posting a growth of 2.6%, following a 0.9% drop in 2013, consultancy Ernst & Young said in a new forecast. In its previous forecast announced in March, E&Y projected a 2.5% growth for this year. The improvement reflects the latest data from the statistics office that showed the first-quarter GDP expanding at a faster rate than the flash estimate. The statistics office said on June 4 the GDP grew by 0.4% on the quarter and by 2.5% on the year in Q1 2014, revising up the data from the preliminary estimate of 0% and 2%, respectively.

The Czech GDP growth is supported by all its main components in a sign that the economic revival has solid foundations and that economic activity could further intensify, according to Jan Fanta, EY managing partner of corporate consulting and risk management.

Yet, the still high unemployment rate will weigh on growth, Fanta said adding that a significant fall in the indicator cannot be expected before early 2015.

E&Y’s GDP growth estimate for this year matches that of the central bank but is more optimistic than the finance ministry’s expectations for a 1.7% economic expansion. For 2015 the central bank sees the GDP growth at 3.3% and the finance ministry at 2%.

E&Y estimates for the Czech Republic 2013 2014 2015 2016 2017
Real GDP growth (%) -0,9 2,6 2,8 3,0 2,9
Domestic consumption  -0,7 2,2 2,5 3,1 3,2
Exports 0,2 6,0 5,1 5,7 5,3
Imports 0,6 6,0 5,2 6,2 5,9
CPI inflation (%) 1,4 0,5 1,8 1,9 2,0
Current account balance (% of GDP) -1,4 -1,6 -1,8 -1,8 -1,6
Public finance balance (% of GDP) -1,5 -2,2 -2,0 -1,8 -1,5
Source: E&Y          
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