The Czech economy grew by 2.8 percent year on year in Q3. Compared to the previous quarter, gross domestic product (GDP) increased by 1.4 percent. This resulted from the first estimate of the Czech Statistical Office (CSO), which published it on its website today . Only domestic demand contributed to GDP growth.
According to the director of the CZSO’s national accounts department, Vladimír Kermiet, the recovery of the Czech economy after the coronavirus pandemic continued in Q3. “The trade and services sector has improved the most,” he said. He pointed out, however, that a slight decline was recorded in the manufacturing industry, where there was a shortage of components. “A large part of work in progress ended up in inventories, which was fully reflected in the negative foreign trade balance,” Kermiet added.
The statistician does not provide details of economic development in the first estimate. However, they said that household final consumption expenditure and gross capital formation in particular contributed to growth. Government final consumption expenditure also rose. “On the contrary, there was a decline in exports of goods. The overall slowdown in foreign demand thus had a significant negative effect on GDP growth,” the CZSO said.
Analysts expected slightly higher numbers. According to their estimates, GDP rose by 2.8 to 3.4 percent in the third quarter. He was expected to show growth slightly below two percent quarter on quarter.
The coronavirus epidemic began to affect the Czech economy last spring. The first cases appeared in the country on March 1, after which the state began to introduce restrictions on trade, services or the movement of people, and the economy contracted year-on-year in the first quarter of last year. The worst drop in GDP was evident in the second quarter, by more than a tenth. The year-on-year decline followed in the following quarters. GDP did not return to growth until this year in the second quarter, when the economy grew by 8.1 percent year on year.