Czech Economic Quarterly
15.12.2014Company: Amcham
In 3Q14, real GDP expanded 0.4% qoq and 2.4% yoy, both figures edging slightly above those of 2Q14. Gross capital formation (up 7.0% yoy) proved to be the key contributor. Private consumption came in a tad weaker than in 2Q14, expanding 1.5% yoy, while government consumption almost stalled (up 0.3% yoy). Net exports subtracted 0.2 p.p. from GDP growth.
■ High-frequency data for October and November, published to-date, leave no doubt that the economic expansion is set to continue in 4Q14. The pace of qoq growth may rise slightly to 0.5% but, considering the base effect, this would slow yoy growth to 1.7%. Full-2014 GDP growth would reach 2.3%.
■ In 2015, private consumption is seen accelerating to 2.3%. We are also rather optimistic on fixed capital formation, predicting the expansion around 4%. The external environment may render the economy limited support. Fiscal policy is set to be moderately stimulating, monetary conditions will stay broadly neutral. We project GDP to expand 2.4%.
■ Looking at the CNB interventions with a one-year hindsight, we argue that they have helped the Czech economy but more so via nominal than real variables. We see cyclical factors as the key accelerator of the Czech economy in 2014.
More information in the attached file.
