Czech Statistical Office. Illustrative image.
Prague – According to a revised estimate, the Czech economy grew by 2.4 percent year-on-year last year. Statisticians thus worsened their estimate from the end of January, when they reported growth of 2.5 percent. The Czech Statistical Office (CZSO) informed about this today. In the last quarter of last year, the gross domestic product (GDP) grew by 0.2 percent year-on-year, while it fell by 0.4 percent compared to the third quarter. The second quarter-on-quarter decline in a row means that the Czech economy has entered a technical recession.
“The main drivers of annual growth were gross capital formation expenditure and foreign demand,” the statisticians said. The formation of gross fixed capital was 6.2 percent higher than in 2021. Investments in other buildings and constructions and means of transport grew mainly. The balance of foreign trade ended in the negative after 19 years, when it fell by 187.6 billion crowns year-on-year to minus 8.3 billion crowns. Household final consumption expenditure fell by 0.9 percent last year, while government institutions' final consumption expenditure increased by 0.7 percent.
GDP grew in every quarter last year in a year-on-year comparison, but growth gradually slowed down. In the first quarter it was by 4.7 percent, in the second by 3.5 percent, in the third by 1.5 percent and in the last by 0.2 percent.
Balance sheets in the fourth quarter of last year had a negative impact especially falling expenditure on household final consumption. They decreased by 5.5 percent year-on-year. People bought less, especially durable goods. “Expenditures on food also fell significantly, which decreased by more than ten percent year-on-year, but the decline was also recorded for other items. Only expenditures for services increased,” said Vladimír Kermiet, director of the National Accounts Department of the CZSO.
Analysts they expected that in the last three months of last year GDP would drop by a few tenths of a percent quarter-on-quarter. It means that the Czech economy entered a technical recession in the second half of 2022. Economists define it as a quarter-on-quarter decline in seasonally adjusted real quarterly GDP in at least two consecutive periods. In the third quarter of last year, the economy fell by 0.3 percent quarter-on-quarter.