Czech Republic likely to grow moderately in 2016

(Correction: The article has been reproduced with due credits)

The Czech economy performed exceptionally well in 2015, driven by improved absorption of EU funds, accommodative monetary policy, cheaper oil prices and low inflation.

Industrial growth posted a strong growth in November and both manufacturing PMI and economic sentiment performed well in December, further signifying that the economy had robust growth last year.

Strong growth of private investment and household consumption seen last year is expected to continue in 2016. This in turn suggests rise in import volumes and slightly negative contribution from net exports to GDP growth.

For the current year, risks are seen to the downside if external demand disappoints and public investments are significantly weaker than anticipated.

“We forecast 4.5% GDP growth last year, 2.8% in 2016 and 3% in 2017”, said JPMorgan in a research note. “The CNB forecast, in its November inflation report, was for 2.6% and full-year growth of 4.7% in 2015 (the bank sees 2.8% in 2016 and 2.9% in 2017).”