According to the revised estimate, the Czech economy expanded by 0.3% quarter-on-quarter and by 0.2% year-on-year in the first quarter, well below the previous estimate and the market consensus.
The main contributors to the mild 0.2% yearly expansion of the Czech economy were robust household consumption and external demand. Consumer expenditure contributed 1.2 percentage points to the overall growth figure, while net exports added robust 2.1 percentage points. In contrast, gross fixed capital formation was a drag, shedding -0.4 percentage points.
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Investment in dwellings, other buildings and structures – as well as other machinery and equipment – declined, pointing to the fragility of the current cyclical upswing. The lead among the negative contributors, however, took the rather volatile item of changes in inventories, which cut 3.4 percentage points from the annual expansion. Overall, the Czech economy continues its mediocre performance, fundamentally below its growth potential.
The mediocre dynamics in the first quarter will likely imply a downward revision of the annual figure, as it has a profound impact on the yearly average.
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ING
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