GDP comes in slightly above the CNB forecast in 2023 Q2
The CNB comments on the GDP figures for 2023 Q2
According to the CZSO’s estimate released today, gross domestic product adjusted for price, seasonal and calendar effects dropped by 0.4% year on year in 2023 Q2. In quarter-on-quarter terms, the Czech economy increased by 0.1%. Compared to the CNB’s summer forecast, the new data point to slightly stronger economic activity.
The data released indicate that the Czech economy has already emerged from a shallow recession. Although households continue to face a decline in their real income, their consumption fell slightly less in Q2 than expected by the CNB. Household consumption returned to growth quarter on quarter, which was fostered, among other things, by gradually decreasing inflation. Compared to the previous quarter, firms’ investment activity picked up significantly, even more than forecasted. By contrast, change in inventories slowed more markedly than forecasted. General government consumption grew faster than the CNB forecast. The contribution of net exports to economic growth was lower than forecasted, with significantly lower growth being recorded by both exports and imports.
2023 Q2
year-on-year in %
actual figure
MPR Summer 2023
Gross domestic product
-0.4
-0.7
Household consumption
-4.4
-5.3
General government consumption
3.3
2.8
Gross fixed capital formation
2.5
-0.5
Change in inventories (in p. p.)
-2.5
-2.0
Exports of goods and services
4.5
8.1
Imports of goods and services
0.8
3.7
Net exports (in p. p.)
2.8
3.3
constant prices, seasonally adjusted
The CNB’s summer forecast expects the Czech economy to be broadly flat this year. Following subdued performance in the first half of 2023, the economy will return to visible growth in the second half of the year. This will be due mainly to renewed growth in real household income which will boost household consumption. The positive contribution of net exports, reflecting the good export performance of the Czech economy, will also play an important role in economic growth. The finalisation of unfinished production and the release of accumulated inventories, which have ceased to be necessary to such an extent as the problems in supply chains abate, will contribute to the strong export performance. Investment activity will rebound this year in an environment of solid corporate profitability. Corporate investment in new technology and renewable energy sources will be accompanied by investment by general government. According to the forecast, the economy will grow by more than 2% next year despite the government’s fiscal consolidation efforts, which will partly dampen growth mainly in household consumption and, to a lesser extent, in investment.
Jakub Matějů, Deputy Executive Director, Monetary Department
GDP comes in slightly above the CNB forecast in 2023 Q2
The CNB comments on the GDP figures for 2023 Q2
According to the CZSO’s estimate released today, gross domestic product adjusted for price, seasonal and calendar effects dropped by 0.4% year on year in 2023 Q2. In quarter-on-quarter terms, the Czech economy increased by 0.1%. Compared to the CNB’s summer forecast, the new data point to slightly stronger economic activity.
The data released indicate that the Czech economy has already emerged from a shallow recession. Although households continue to face a decline in their real income, their consumption fell slightly less in Q2 than expected by the CNB. Household consumption returned to growth quarter on quarter, which was fostered, among other things, by gradually decreasing inflation. Compared to the previous quarter, firms’ investment activity picked up significantly, even more than forecasted. By contrast, change in inventories slowed more markedly than forecasted. General government consumption grew faster than the CNB forecast. The contribution of net exports to economic growth was lower than forecasted, with significantly lower growth being recorded by both exports and imports.
constant prices, seasonally adjusted
The CNB’s summer forecast expects the Czech economy to be broadly flat this year. Following subdued performance in the first half of 2023, the economy will return to visible growth in the second half of the year. This will be due mainly to renewed growth in real household income which will boost household consumption. The positive contribution of net exports, reflecting the good export performance of the Czech economy, will also play an important role in economic growth. The finalisation of unfinished production and the release of accumulated inventories, which have ceased to be necessary to such an extent as the problems in supply chains abate, will contribute to the strong export performance. Investment activity will rebound this year in an environment of solid corporate profitability. Corporate investment in new technology and renewable energy sources will be accompanied by investment by general government. According to the forecast, the economy will grow by more than 2% next year despite the government’s fiscal consolidation efforts, which will partly dampen growth mainly in household consumption and, to a lesser extent, in investment.
Jakub Matějů, Deputy Executive Director, Monetary Department