Market sees Czech economy exiting recession in Q2.

By bne IntelliNews August 13, 2013

Czech economy probably exited its longest recession on record in the second quarter of 2013 helped by government spending and rising demand from abroad, analysts polled by CTK news agency said.

The gross domestic product grew by 0.6% on the quarter in Q2, following a 1.3% contraction in the first three months of the year, the the biggest fall during the economic downturn. The economy shrank for six straight quarters till Q1 as the government’s fiscal consolidation measures and the eurozone’s debt crisis eroded spending by businesses and households and curbed demand for exports.

Analysts expect the GDP to fall by over 1% on the year in Q2, after a 2.4% annual slump in the first quarter. The statistics office will announce preliminary GDP data for Q2 on August 14.

The ailing economy has forced the central bank to cut interest rates close to zero and central bankers are now debating when to launch the first in more a decade currency interventions to weaken the koruna and further ease the monetary conditions. According to minutes from the central bank’s latest rate setting meeting on August 1, the central bankers said that economic data are sending mixed signals. While the quarterly rise in household consumption, some positive data from the labour market and widening trade surplus point to the end of economic recession, retail sales and industrial output showed a sharper than expected drop in June.

Measures to revive the economy have been delayed as the centre-right government of Petr Necas collapsed in June amid a bribery and spying scandal. Then President Milos Zeman appointed his longtime leftist ally Jiri Rusnok to form a new cabinet against the will of the main political parties and as expected he failed to win a vote of confidence in parliament last week paving the way for early elections to be held likely in October before a regular vote due next May.

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