By Jason Hovet
May 2 (Reuters) - The Czech economy probably pulled out
of recession in the first quarter with slight growth driven by
trade, preliminary data indicated on Tuesday, although high
inflation continued to bite.
Gross domestic product in the Czech Republic increased by
0.1% quarter-on-quarter, defying a Reuters poll forecast for a
0.1% drop. GDP shrank by a less-than-expected 0.2% year-on-year,
the data showed.
The Czech Republic is the first economy in central Europe to
report first-quarter GDP data, but all have felt the strain of
high inflation, driven by steep energy price rises last year. At
the end of 2022, the Czech and Hungarian economies slipped into
technical recession, defined as two consecutive quarters of
declining quarter-on-quarter GDP.
"So it is confirmed, the recession really ended (last
quarter)," Komercni Banka economist Jan Vejmelek said in a
Twitter post after the data.
The Czech statistics office did not give details of the
preliminary data but said external demand buoyed the economy
while household consumption decreased. Updated data is due on
May 30.
Inflation has surged to double-digit rates across central
Europe but looks to have passed a peak. Interest rates remain
elevated and central banks are not in a hurry to ease policy
until price growth is under control.
Industrial output figures in the region mostly showed
declines in January and February, and activity is likely to
remain sluggish.
Activity in Poland's manufacturing sector deteriorated in
April, according to S&P Global's Polish Purchasing Managers'
Index, released on Tuesday. The index fell to 46.6 from 48.3 in
March, staying below the 50.0 line that separates growth from
contraction.
(Reporting by Jason Hovet in Prague; Editing by Susan Fenton)
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