Record Q3 Results – Economy Grows 2x Faster Than Entire European Union

Prague, Dec 1 (CTK) – The growth of the Czech economy in Q3 is the best result achieved in almost two years and, in addition, it has been spread relatively evenly, which increases its robustness and lowers the risk of a notable slowdown, according to analysts polled by CTK.


The favourable development is most likely to continue in the quarters to come, the analysts agreed.


According to today’s revised data of the Czech Statistical Office (CSU), the Czech economic growth accelerated annually to 5 percent in Q3 from 4.7 percent registered in Q2.


“On the side of demand, the growth is being driven almost equally by household consumption and investments. Foreign trade has a positive influence as well. The consumption is being pulled up by record-high employment hand in hand with the improving financial situation of households,” CSOB analyst Petr Dufek said.


The strong positive influence of foreign trade is impressive because the opposite could be expected in the period of increasing domestic consumption as well as investment demand, Dufek said.


The Czech economy is growing about twice faster than the economy of the entire EU as well as the euro zone, Bohuslav Cizek of the Confederation of Industry said.


“The growth will continue, though not as fast as this year. We expect GDP to rise by slightly more than 3 percent next year,” Cizek said.


The evenly spread growth connected with higher investment activity is also a good prerequisite for the favourable situation to continue in the forthcoming period, ING Bank analyst Jakub Seidler said.


According to Seidler, the domestic economy will accelerate by about 4.5 percent this year, which will be the fastest GDP growth in the past ten years with the exception of 2015.


The Czech economy remains the leader of the region, maintaining the fastest GDP growth of all Central European countries, Komercni banka analyst Viktor Zeisel said.


According to UniCredit Bank analyst Pavel Sobisek, it is hard to find any signs of any beginning problems in the released data. The excellent condition of the domestic economy will most likely be confirmed in the last quarter of the year, and, thanks to its momentum, the entrance to 2018 will be successful as well, Sobisek said.


Investments in machinery are signalising that, face to face a lack of suitable workforce and the growth of labour costs connected with it, the business sphere is increasing its productivity, Cyrrus analyst Lukas Kovanda said.


Productivity in the Czech Republic is most likely to grow at one of the fastest paces in the EU this year, which is a prerequisite for the growth of living standards in the Czech Republic in the years to come and for real convergence towards economically more advanced EU countries, Kovanda said.