According to revised figures from the Czech Statistical Office, the Q1 gross domestic product adjusted for price, seasonal and calendar effects increased 2.8% YoY compared to the previous quarter, it rose by 0.9%. Both figures are 0.3 percentage points higher than preliminary estimates released in May.
ČSÚ said that the corrections resulted from more complete data on the development of the business and general government sector, and were also due to partial corrections of indicators for the individual quarters of 2010.
Komerční banka analyst Miroslav Frayer said that “The Q1 GDP clarification presented a favorable surprise. … The statistics unveiled weak household and government consumption, which was offset by foreign demand and the creation of inventories.”
He said that “In line with expectations, fixed investment dropped and thus contributed negatively to the total GDP growth. Compared with the CNB forecast, the Czech economy grew 0.5 percentage points faster.”
The ČSÚ said that on the demand side of the economy, external trade was the source of an economic boom; and a revival of investment activity exerted a positive influence. On the supply side, manufacturing pushed the increase of gross value added formation, as in previous quarters. Significant growth in inventories is possible only in the event of a lasting recovery abroad.
Several factors will influence future developments. Mr Frayer said that “Most important for the small open Czech economy will be developments in the eurozone, in particular in Germany, where the economy should still generate strong growth, amounting to 2.3% however, it will be less than last year (3.5%).”
He added that “Significant growth in inventories is possible only in the event of a lasting recovery abroad; their potential for a highly positive contribution to quarter-on-quarter GDP growth is already depleted. Another factor influencing the dynamics of the Czech economy is and will continue to be fiscal tightening aimed at stabilizing public finances.”
(Sourced from www.ceskapozice.cz)
