PRAGUE, Dec 9 (Reuters) - The Czech economy rose by 0.8
percent in the third quarter from the previous three-month
period, confirming an earlier flash estimate, the statistical
bureau said on Wednesday.
On an annual basis, the economy fell by a real 4.1 percent
between July and September, also unchanged from a preliminary
reading on November 13.
The annual drop was mainly due to a sharp fall in
manufacturing and capital formation, while consumer demand held
up to show a year-on-year rise.
The Czech year-on-year contraction was better than the
decline in neighbouring Slovakia, which posted 4.8 percent
year-on-year drop in July-September, and stronger than a 7.1
percent drop in Hungary. []
Poland was the only country in the region to buck the trend
with 1.7 percent growth in the quarter.
Seperately, data also showed Czech consumer prices rose by
0.2 percent in November from October, putting the annual
inflation rate at 0.5 percent.
****************************************************************
KEY POINTS:
CZECH Q3 GDP (pct) Q/Q YR/YR
Real change 0.8 (0.8) -4.1 (-4.1)
(pct change) Nov Oct Nov forecast
month/month 0.2 -0.2 0.1
year/year 0.5 -0.2 0.4
CENTRAL BANK FORECAST: The central bank had forecast a
third-quarter GDP decline of 4.9 percent in its most recent
projection unveiled in November. In its quarterly forecast, it
also saw November annual inflation at 0.1 percent, while
analysts in a Reuters poll saw it at 0.4 percent.
The bank cut interest rates to a record low of 1.25 percent
on August 6, and has held rates at this level in its last two
policy meetings.
(For full table of Q3 GDP data................[])
DETAILS:
- The supply side of the economy was impacted by the
manufacturing industry which dropped 9.0 percent in the third
quarter.
- Nominal trade balance was 35.1 percent higher year-on-year,
the bureau said.
- The monthly consumer price growth was mainly due to a rise in
fuel prices which grew 3.7 percent.
COMMENTARY:
JAN VEJMELEK, HEAD OF ECONOMIC STRATEGY AND RESEARCH,
KOMERCNI BANKA
"(The quarterly) growth was mainly due to fiscal stimuli
abroad... But the latest data from abroad, mainly from Germany,
show that the end of fiscal stimuli will mean one more wave of
cooling in economic activity, which in the Czech economy will
show through weaker quarter-on-quarter growth already in the
fourth quarter 2009."
"For the first quarter of 2010 we even see a risk of a
repeated quarterly drop as the economy will have to cope with
weaker demand from abroad as well as the restrictive effect of
the (government) fiscal package."
"(As for inflation), the monthly growth... was due to more
expensive fuels, food, and non-alcoholic beverages which are
segments that the central bank cannot influence with its
monetary policy."
PETR DUFEK, ANALYST, CSOB
"It is interesting to see rising household consumption at a
time of growing unemployment, but we can see a slowdown here as
well. The fall of investment is not a surprise given that
existing capacities in the economy are far from being utilised,
let alone creating new ones.
The picture of the economy is not changing, we can expect an
improvement also in the final quarter. The eocnomic revival
however will be only modest and vulnerable to swings in foreign
demand."
RAFFAELLA TENCONI, ANALYST, WOOD&CO
"The breakdown confirms that household spending and general
consumption performed quite well, which was very good. On the
investment side, the overall figure is still heavily down, 23
percent year on year, but still due to destocking, not as
heavily as in previous quarter but still destocking.
"The overall picture in my view is consitent with
stabilisation, even a gradual improvement of domestic spending
in coming quarter.
"Inflation... came out higher than I expected, I was looking
for 0.3 year on year. It's mainly due to commodities.
"That does not really change the inflation fundamental
drivers of the econmy but it does argue that probably (interst)
rates will remain unchanged in the near term."
BACKGROUND:
- For story on analysts' expectations before the data release,
double click on...................[] []
- Slovak Q3 GDP..................................[]
- Poland's Q3 GDP................................[]
- Hungary's Q3 GDP...............................[]
- Report on last Czech c.bank rate decision.......[]
[] [] []
LINKS:
- For further details on third quarter GDP and November other
past inflation data, Reuters 3000 Xtra users can click on the
Czech Statistical Bureau's website:
http://www.czso.cz/eng/csu.nsf/kalendar/2004-hdp
- For LIVE Czech economic data releases, click on <ECONCZ>
- Instant Views on other Czech data []
- Overview of Czech macroeconomic indicators []
- Key data releases in central Europe []
- For Czech money markets data click on <CZKVIEW>
- Czech money guide <CZK/1>
- Czech benchmark state bond prices <0#CZBMK=>
- Czech forward money market rates <CZKFRA>
(Reporting by Jana Mlcochova)
