The Numbers Are In: GDP Posts Positive Gains For 4th Consecutive Year, Up 4.6% in 2017

Andrej Babiš, Czech Economy, Miloš Zeman

Prague, April 3 (CTK) – The Czech economy expanded by 5.5 percent in Q4 yr/yr, against the previous estimate of 5.2 percent, and gross domestic product (GDP) for the entire year grew by 4.6 percent, while early in March statisticians estimated a 4.5 percent hike, they said today.


Q4’s GDP growth was 0.8 percent higher compared to the previous three months. New data for the sector of government institutions were behind the improvement, the Czech Statistical Office (CSU) said in its revised information.


The new figures mean contradictory signals for the economy this year, UniCredit Bank analyst Pavel Sobisek told CTK.


On the one hand, the fast GDP growth rate at the end of last year provides room for an improvement of 2018 outlooks. On the other hand, more and more apparent signs of a cyclical slowdown are negatively affecting the business sector, Sobisek said.


Last year’s profit rate of companies is unlikely to be repeated this year, he added.


The economy grew for a fourth straight year in 2017. GDP growth was 2.5 percent in 2016, 5.4 percent in 2015 and 2.7 percent in 2014.


Real incomes of households added 3.9 percent last year in annual terms, and household consumption per capita was even 4.6 percent higher, statisticians said today.


In absolute terms, the monthly per capita household income reached an average Kc24,842, while per capita consumption reached Kc22,925 on average.


The rate of profit of non-financial companies decreased by an annual rate of 1.1 percentage point to 49.4 percent. “Still, however, the profit rate in the Czech Republic was well above the European Union average of about 40 percent,” the CSU said.


The lower profit rate of these companies was caused by a faster increase of wage costs that added 8.4 percent last year in annual terms, the CSU said.


Investments of companies rose by 0.2 percentage points to 29.4 percent compared to 2016.