According to the CZSO’s estimate released today, gross domestic product adjusted for price, seasonal and calendar effects rose by 0.2% year on year in 2022 Q4. In quarter-on-quarter terms, the economy declined by 0.4%. Domestic economic activity increased by 2.4% in 2022 as a whole. By comparison with the CNB’s winter forecast, GDP grew slightly less year on year in Q4 and its quarterly decline was somewhat deeper than forecasted.
The data released on economic activity confirm that the Czech economy
switched to a shallow recession in the second half of 2022. Household
consumption, which is being affected by the sharp fall in real income and worse
sentiment, decreased more significantly in Q4 than expected by the CNB. The
contribution of net exports was also lower than forecasted, with exports and
especially imports rising faster than projected. Conversely, gross capital
formation rose above expectations. This was due to surprisingly high
year-on-year growth in fixed investment, which was largely caused by a
historical revision. General government consumption recorded moderate
year-on-year growth, whereas the CNB had expected a partial drop. The deviations
of the individual demand components from the forecast virtually offset each
other overall.
2022 Q4 year-on-year in %
MPR Winter 2023 Actual figure
Gross domestic product 0.5 0.2
Household consumption -3.3 -5.5
Government consumption -1.0 0.9
Gross capital formation 0.2 2.6
Exports of goods and services 8.6 9.7
Imports of goods and services 5.7 7.6
constant prices, seasonally adjusted
According to the CNB’s winter forecast, the domestic economy will drop
slightly overall this year and will be below its potential. The economic
downturn will occur mainly in the first half of the year, as output will be
adversely affected by a deteriorating financial situation of households, slower
growth in external demand and lingering problems in global logistics. Economic
activity will return to growth in the second half of the year. An unwinding of
the problems with supplies of materials and components for production during the
year will gradually support export activity, with net exports significantly
aiding the economic recovery. Private consumption will also rebound in late 2023
and early 2024, thanks to a fade-out of the high inflation and renewed real wage
growth. Likewise, growth in private fixed investment will recover on the back of
stronger external demand and in connection with a switch to alternative energy
sources amid a long-term shift towards automation, robotisation and
digitisation. In 2024, economic activity will grow by more than 2%.
(Reporting by Prague newsroom)
