Czech Economic Quarterly
21.03.2013Company: Amcham
Headwinds starting to fade.
- In 4Q12, recession was going on for the fourth quarter in a row. Real GDP came in at -0.2% qoq and -1.7% yoy. Private consumption, slumping 4.1% yoy, was largely to blame for the GDP contraction, whereas other components turned to be only marginal (positive or negative) contributors to GDP.
- For 1Q13, we see industrial output stabilizing and private consumption easing its yoy decline to 1%. Capital expenditure may in contrast extend its decline. On external demand, recovery is in the pipeline but uncertainty over its timing makes us stay conservative. On balance, this brings us to a call of GDP flat qoq and declining 1.2% yoy.
- 2013 is hoped to bring a reversal in the Czech economy’s performance lagging behind the euro area. The sequence of GDP recovery should go from net exports to private consumption.
- In 2014, accelerating wage growth and higher investment activity are forecast to bring GDP growth to 2.2%, making growth largely domestically driven.
- For the time being, the CNB will stick to its policy of keeping monetary conditions accomodative by preventing CZK from appreciation. That said, the CNB seems happy with the current EUR/CZK rate and no interventions are being considered for now.
