Czech economic growth likely to have decelerated in Q2

The Czech economy is likely to have slowed further in the second quarter. The decline in the fixed capital formation in the first quarter is expected to have spilled over into the second quarter as well, said Societe Generale in a research report. Public investment in the Czech Republic continues to be sluggish due to a marked drop in the EU fund inflows.

Even if net exports and household consumption are expected to have positively contributed to the second quarter economic growth, their dynamics are unlikely to have been strong to pull up the GDP growth above 0.3 percent quarter-on-quarter, according to Societe Generale.

In year-on-year terms, this is equal to a deceleration of growth to 2 percent from 3 percent. For the entire 2016, the Czech Republic’s GDP growth is likely to average 2.1 percent, a considerable slowdown from 2015’s 4.6 percent growth, added Societe Generale. The slowdown is mainly driven by a decline in public investment.