Investment in Czech Republic
Czech Republic - Investment
Economic growth remains healthy in Q3
A detailed breakdown of GDP, released by the Statistical Institute on 30 November, revealed the economy maintained momentum in the third quarter. The economy grew a seasonally-adjusted 2.4% year-on-year in Q3, a notch above the 2.3% growth rate shown in the preliminary release and matching Q2’s annual expansion. In quarter-on-quarter terms, the Czech economy slowed slightly from the 0.7% expansion logged in Q2, growing 0.6% in the third quarter.
As in the second quarter, domestic demand was the engine of growth in Q3. Private consumption grew 3.1% in year-on-year terms, marginally below the revised 3.2% increase recorded in the second quarter (previously reported: +3.5% yoy). An extremely tight labor market, rapid wage growth—up 8.5% year-on-year in nominal terms in Q3—and elevated consumer confidence bolstered household spending in Q3. Investment activity was again the main driver of the expansion, growing a stellar 9.3% year-on-year on the back of increased investment in buildings, machinery and transport equipment, and above the revised 8.5% jump recorded in Q2 (previously reported: +7.8% yoy). Meanwhile, government consumption climbed a robust 5.3% year-on-year, well above the revised 2.9% expansion in the previous quarter (previously reported: +2.6% yoy) and the strongest rise in over a decade.
On the external front, exports rose 4.5% in Q3, largely driven by shipments of electronic products and electrical equipment (revised Q2: +3.7% yoy; previously reported: +3.5% yoy). Meanwhile, imports grew 6.2% year-on-year in Q3, largely reflecting strong domestic demand dynamics and the high import component of higher investment activity (revised Q2: +4.8% yoy; previously reported: +4.4% yoy). Taken together, the external sector subtracted 1.0 percentage points from overall growth, a greater drag than the 0.5 percentage point write-down recorded in Q2.
Going forward, buoyant household consumption and capital spending are expected to continue driving economic activity ahead. Given the Czech economy’s export-oriented industrial base, however, escalating global trade tensions and a potential slowdown in foreign demand represent sizeable downside risks to the outlook.
The Czech National Bank expects the economy to expand 3.3% in both 2019 and 2020. Met the why particular Consensus Forecast panelists see the economy expanding 3.0% in 2019, which is unchanged from last month’s projection. For 2020, the panel sees GDP increasing 2.6%.
Czech Republic - Investment Data
|Investment (annual variation in %)||-2.5||4.0||11.4||-2.5||5.9|
5 years of economic forecasts for more than 30 economic indicators.
Czech Republic Facts
|Bond Yield||2.01||-1.85 %||Dec 14|
|Exchange Rate||22.86||-0.66 %||Dec 14|
|Stock Market||1,028||-0.11 %||Dec 14|
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December 11, 2018
Consumer prices declined 0.1% from the previous month in November, contrasting October’s 0.4% rise.
December 7, 2018
Industrial production jumped 6.7% year-on-year in October, rebounding from September’s 0.6% dip.
December 3, 2018
The manufacturing Purchasing Managers’ Index (PMI) produced by IHS Markit slipped from 52.5 in October to 51.8 in November, the fifth consecutive monthly fall and the lowest reading in over two years.
November 30, 2018
A detailed breakdown of GDP, released by the Statistical Institute on 30 November, revealed the economy maintained momentum in the third quarter.
November 26, 2018
The economic sentiment indicator, a composite confidence indicator published by the Czech Statistical Office (CSO), dipped from 99.8 points in October to 99.3 in November.