William Malcolm

Czech Economy Grew 7.8% In Second Quarter

The Czech economy grew by 7.8 percent year on year in the second quarter and increased by 0.6 percent compared to the previous quarter. This resulted from the first estimate of the Czech Statistical Office, which published it on its website.

Gross domestic product (GDP) returned to year-on-year growth after a year and a quarter. Its amount exceeded the previous largest year-on-year growth of the economy so far from the second quarter of 2006 when it was 7.5 percent. The result was positively affected by the easing of restrictions on coronavirus, which hit the economy hard last year, and in particular by foreign demand and increased household consumption.

“The easing of anti-epidemic measures has enabled households to partially realize deferred consumption. Household expenditures on services have also increased,” said Vladimír Kermiet, director of the CZSO’s national accounts department.

Economic growth was more modest than analysts had expected. They assumed that the economy would grow by about nine percent in the quarter under review. They justified this mainly by the low comparison base from last year affected by the restrictions related to the covid-19 pandemic.

“Year-on-year growth in gross value added was mostly influenced by developments in industrial sectors. The quarter-on-quarter comparison was positively affected mainly by the group of trade, transport, accommodation, and hospitality,” the statistics said.

At the same time, Kermiet recalled that the shortage of components in a number of industries had increased stocks of work in progress, which had an impact on exports of goods.