Czechia’s gross domestic product (GDP), seasonally adjusted, increased by 0.4% year-on-year and by 0.3% quarter-on-quarter. The figure was below market expectations and also below the Czech National Bank forecast of 0.7% y/y.

Czech Statistical Office (CZSO) published the figures confirming weak growth as some segments of Czechia’s economy signalled an uptick in domestic demand, including renewed growth in retail trade registered in the spring months.

“The y/y growth of the economy by 0.4% was mainly supported by final consumption expenditure of households,” commented Vladimir Kermiet, director of the National Accounts Department at CZSO.

“Final consumption expenditure of general government was also increasing and external demand had a positive influence too,” Kermiet  said, adding that “a change in inventories contributed negatively”.

CZSO also highlighted that the development of the gross value added was positively influenced “in both comparisons mainly by a group of economic activities of trade, transportation, and accommodation and food service activities”.

The positive influence came also from information and communication and financial and insurance activities, while “a decrease in industry continued”. Czech industrial production has been experiencing a disappointing slump this spring, falling by 3.2% y/y in May in what market analysts warned has been the deepest drop since last September.

Generali Investments head economist Radomir Jac pointed out for Czech Television (CT) that the Czech economy outperformed other economies in the region, including Hungary and Austria, which fell by 0.2% and stagnated, respectively.

“It can be said that the whole of Europe is currently suffering from weak performance of industry, which is an important sector for Czech economy and Germany,” a key market for the export-oriented Czech economy.

“The domestic economy grows for the third quarter in a row, however, the pace of growth is not very impressive and at the same time the future outlooks began to weaken again in the context of weaker development abroad,” head economist of the Czech Banking Association Jakub Seidler was quoted as saying by CT.      

Local economists surveyed by the Czech Press Agency (CTK) project about 1% growth for this year.