Friday, 18 April 2014

Economic recession continued in Q4 of 2012

ČTK |
13 February 2013

Prague, Feb 12 (CTK) - Czech economy remained in recession also in the last quarter of 2012, according to estimates of analysts addressed by CTK who think on average that against the previous quarter, Czech GDP fell by 0.3 percent due to the decreasing household consumption.

An economy is in recession when its performance contracts for two quarters of a year in a row. The domestic economy has been in recession since the end of 2011.

Year-on-year, analysts estimate GDP contraction at some 1.5 percent for Q4 2012. For the whole of last year, they count on roughly a 1.1 percent fall.

"Households consumption decreased as did government spending and investment activity of companies. Foreign trade continues improving but its contribution to GDP growth is getting weaker and insufficient to compensate the weak domestic demand," said Patria Finance chief economist David Marek.

Marek expects the economy to remain in recession also this year and GDP to shrink by another 0.6 percent.

"The economy did not do too well in the last quarter. Key statistics mostly showed a negative trend. As regards consumer demand, we still see strong consumer aversion to spend higher amounts of money," said Home Credit analyst Michal Kozub.

The economic contraction could have been even bigger if it was not for the good results of foreign trade, he added.

The Czech Statistical Office (CSU) will make public preliminary GDP estimate for Q4 2012 on Thursday, February 14. The estimate will not contain detailed information about the structure of economic development.

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