Czech Rep. Economic Outlook
June 4, 2019Recently-released GDP data showed that growth held steady in Q1 from Q4 2018’s healthy upturn. Household spending, which strengthened amid buoyant real wage growth and an extremely tight job market that saw the unemployment rate dip to a historic low, drove growth in the quarter. Fixed investment cooled markedly while net trade improved marginally, but this was mainly due to a sharp slowdown in imports. Looking at Q2, available data hints at somewhat softer activity. After an uptick in April, economic sentiment tumbled to a near-three year low in May. In particular, confidence in the industrial sector declined amid a deterioration of firms’ near-term outlook—reflective of still-elevated trade tensions and weak dynamism of German manufacturing. Meanwhile, on 31 May, the European Commission determined that Prime Minister Andrej Babis breached conflict-of-interest rules over his ties with the Agrofert conglomerate, which he placed in trust funds in 2017. If the findings are confirmed in further proceedings, his minority government could face a potential no-confidence vote.
Czech Republic Economic GrowthAlthough the economy is seen losing some steam this year, growth should remain solid overall. In particular, private consumption—buoyed by rising wages and low unemployment—should continue driving activity. Given the country’s export-oriented industrial base, weakening EU demand and an intensification of global trade conflicts pose key risks to the outlook. Met the why particular analysts expect growth of 2.6% in 2019, which is down 0.1 percentage points from last month’s forecast, and 2.5% in 2020.
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Czech Republic Facts
|Bond Yield||1.60||-1.85 %||Jun 13|
|Exchange Rate||22.66||-0.66 %||Jun 13|
|Stock Market||1,051||-0.11 %||Jun 13|
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Czech Republic Economic News
June 11, 2019
Consumer prices rose 0.7% from the previous month in May, following April’s 0.1% month-on-month increase.
June 6, 2019
Industrial production rose a solid 3.3% year-on-year in April, a five-month high and well above March’s marginal 0.2% increase.
June 3, 2019
The manufacturing Purchasing Managers’ Index (PMI), produced by IHS Markit, remained at April’s 46.6 in May, marking the six successive monthly contraction of the all-important sector and the lowest level since December 2012.
May 31, 2019
According to a detailed breakdown of GDP released by Czech Republic’s Statistical Institute on 31 May, the economy grew a seasonally-adjusted 2.6% year-on-year in the first quarter, a notch above the 2.5% growth rate shown in the preliminary release and matching Q4 2018’s increase.
May 24, 2019
The economic sentiment indicator, a composite confidence indicator published by the Czech Statistical Office (CSO), declined to a near three-year low of 95.7 in May from 97.1 in April.