Analysts comment continuing recession

Prague, Dec 7 (CTK) - The Czech Statistical Office's (CSU) revised estimate of gross domestic product (GDP) for Q3 confirmed recession in the Czech Republic whose length is similar to the most indebted countries in the south of Europe, analysts polled by CTK have agreed.

A modest growth will likely return next year, according to them.

The CSU Friday confirmed a GDP contraction of 0.3 percent in Q3 compared to Q2 and an annual drop of 1.3 percent.

"The revised GDP data do not change the economic picture of the Czech Republic," UniCredit Bank analyst Pavel Sobisek has said.

"With the recession lasting four consecutive quarters, we are in Europe in the same group as Spain, Portugal, Cyprus and Greece," said Sobisek.

Eight EU countries show a deeper annual GDP fall than the Czech Republic, he said. Of the countries, however, only the Netherlands has not been mentioned in connection with the debt crisis, just like the Czech Republic, Sobisek said.

Jiri Moser, a managing partner of PwC CR, said that an expected 0.5 percent euro zone contraction this year is an equivalent of around 1 percent fall of the Czech economy.

Stagnation in the euro zone and in the Czech economy can be foreseen for next year. "In the following years the economy should be more in positive territory. Our study shows that after Russia the Czech Republic is the second best-prepared economy for possible further problems in Central and Eastern Europe," said Moser.

"It has no sense to analyse the specific figures that will yet change many times but the trends. And the trends are clear. Households save putting off purchases of durable goods and they also save on food," Next Finance's Vladimir Pikora said.

Investment is falling both in residential and non-residential buildings, which leads to a dramatic fall of construction. The sector cuts workforce as a result, Pikora said.

"People fear for jobs. Moreover, they know that prices will grow next year due to tax hikes. The circle is closing," he added.