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Czech economy continues to grow, GDP 4% higher

Staff writer ▼ | March 4, 2016
The Czech economy continued to grow in the end of 2015, however, with a lower growth rate than in the preceding quarters.
Czech Republic   Consumption expenditure of households maintained high growth
The gross domestic product (GDP) adjusted for price effects and seasonally adjusted was by 4% higher in the Q4 2015 than a year ago. Compared to the previous quarter the GDP remained unchanged.

Growth of the Czech economy continued, which can be seen also from the positive q-o-q development of the gross value added. Compared to the Q3 2015, the gross value added (GVA) was by 0.5% higher; in the y-o-y comparison it increased by 3.8%.

On the supply side, it was manufacturing which contributed the most to the economy’s growth (1.8 p.p.) despite its slight growth rate deceleration in the end of the year.

Especially the following were successful: manufacture of transport equipment, metals, plastic products, and food. Also most of industries of services contributed to the economic growth.

For example, contribution of trade, transport, accommodation and food service activities was 0.5 p.p., information and communication contributed with 0.4 p.p., and public administration 0.5 p.p.. Contribution of construction was 0.3 p.p..

On the demand side, the economic growth in the Q4 2015 was pulled by both domestic and foreign demand. The GDP growth was contributed to by household consumption by 0.9 p.p.[3] and by investment activity in the same way as external trade by 1.6 p.p..

Final consumption expenditure of households maintained rather high q-o-q growth rate (0.9%) and increased by 2.9%, y-o-y. Compared to very high investment activity in the Q3 supported mainly by government investments, in the end of the year there was a slight drop in the fixed capital formation, namely by 0.9%.

In the comparison with the corresponding period of the previous year, however, the fixed capital formation remained still very high (by 7.9%).

Also external trade was successful in the end of the year. Balance of goods and services reached CZK 79.3 bn at current prices and was thus (mainly owing to the balance of services) by more than CZK 11 bn higher[4] than in the Q4 of the previous year.

Employment in terms of national accounts increased in the Q4 2015 by 0.2%, q-o-q, and by 1.1%, y-o-y.