Czech economic growth expands in Q2 on robust foreign demand, stable household consumption

The Czech Republic’s economic growth rose 0.9 percent in sequential terms, seasonally adjusted, according to a refined estimate released by Czech Statistics Office. In annual terms, the economy expanded 2.6 percent. Stable household consumption and robust foreign demand mainly drove the second quarter economic growth.

The gross value added (GVA) increased by 0.9%, q-o-q, and by 2.7%, y-o-y. The favourable development of the economy continued in most of the economic activities of the Czech economy, except for construction, stated Czech Statistics Office.

On the demand side, external trade contributed 2.5 percentage points to the economic growth. Meanwhile, final consumption expenditure of households added 0.8 percentage points. On the other hand, significant drop in investment activity negatively influenced the GDP growth. The drop in investment activity was mainly related to the fall in construction investments.

Final consumption expenditure of households rose 2.2 percent year-on-year and 0.1 percent quarter-on-quarter. As in the earlier quarters, expenditure rose in all basic categories of household consumption. Exports grew 5.7 percent on annual basis, whereas imports rose significantly by 3.1 percent. Growth in imports was driven by sub-deliveries for the automotive industry and manufacture of electrical equipment.

Meanwhile, on the labor market front, the economic growth was reflected positively in the second quarter with the employment growth, according to Czech Statistical Office. Employment was up 1.6 percent year-on-year and 0.3 percent in sequential terms.