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Czech economy suffers massive blow

Christian Fernsby ▼ | May 16, 2020
The impacts brought by the government measures imposed to halt the spread of the coronavirus ended a six-year growth period of the Czech economy, according to data published by the Czech Statistical Office (CSU) on Friday.
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In the first quarter (Q1) of 2020, GDP in the country fell by 2.2 percent year-on-year, and dropped 3.6 percent compared to the previous quarter due to a decline in industry and services.

Topics: Czech

According to the office, there was a deterioration in the foreign trade balance and a decline in investment activity and household spending, however, government spending helped to moderate the decline.

Industrial production in March declined by 8.7 percent, which dealt a serious blow to the economy. "Production in the automotive industry fell by more than a quarter and the nearest subcontractors fell by a tenth," said CSU head Marek Rojicek, noting that declines had already been developing slightly before confinement measures in March.

The service sector also took a plunge. "For the entire quarter, sales in services fell by 4.3 percent year-on-year at constant prices, of which the decline was more than 10 percent in March. Accommodation, hospitality and catering were particularly affected, where sales fell by half year-on-year in March," Rojicek added.

In addition, retail sales in March fell by 9.3 percent year-on-year, leading to a 0.7 percent decline in Q1 for the first time in six years.