In the first quarter, the Czech gross domestic product increased by 0.2% year on year and by 0.3% quarter on quarter for another unconvincing quarterly performance.
It is a worsened estimate on the 0.4% y/y and 0.5% q/q growth released by the Czech Statistical Office (CZSO) a month earlier, which surpassed market expectations.
“The refined estimate confirmed a slight q/q as well as y/y growth of the Czech economy,” commented Vladimir Kermiet of CZSO.
Statisticians highlighted that higher spending of households and external demand “mainly supported” the slight increase, while “gross domestic formation had a negative effect.”
Final consumption expenditure increased by 0.9% q/q and by 2.5% y/y. Consumer expenditure accounted for 1.2 percentage points in the growth figure, while net exports represented 2.1 pp. Gross fixed capital formation accounted for a disappointing -0.4 pp.
CZSO also reported a decrease of 7.9% q/q and 2.7% y/y in gross fixed capital formation as y/y “investments into dwellings and other buildings dropped,” as did “investments into ICT and other machinery and equipment.”
The drop in investments was singled out as a major disappointment by analysts surveyed by Czech Television.
“Q/q and y/y drop points to the unwillingness of companies to venture into investment endeavours and it is left to speculations whether this is due to an unattractive economy affected by high energy prices or high interest rates which companies were avoiding anyway with euro loans,” head economist at Banka Creditas, Petr Dufek, was quoted as saying by CT.
The gross value added (GVA) decreased by 0.1% q/q and by 0.7% y/y, with q/q negative effect coming from manufacturing (-2.1%), real estate activities (-2%), and a positive one from trade, transportation, accommodation and food service activities (+1.9%). The y/y negative influence came from industry (-1.5%), and construction (-4%), while positive influence came from financial and insurance activities (+4.9%).
Although registering a surplus of CZK5.9bn in a change in inventories, it was by CZK51.1bn (€2bn) less y/y.
