Prague - The Czech economy stagnated in Q1 2014 compared with the previous quarter owing to a drop in revenue from excise duty on tobacco products, caused by pre-stocking at the end of last year, according to preliminary estimates released by the Czech Statistical Office (CSU) today.
Year-on-year, gross domestic product (GDP) grew by 2 percent in Q1. Analysts mostly predicted a decline of the economy in a quarter-on-quarter comparison, but they expected the year-on-year growth.
"In the quarter-on-quarter comparison, the GDP did not increase due to a significant drop in income from the excise tax on tobacco products resulting from stocking up at the end of 2013 on the account of the first and second quarter of 2014," statisticians said.
The year-on-year GDP growth was driven mainly by the manufacturing industry, which profited from a low comparison basis from last year and from increasing domestic and foreign demand.
"Successful were especially the manufacture of transport equipment, and of rubber and plastic products, and also other industries that were able to flexibly react to increasing domestic and foreign demand," the CSU said.
On the expenditure side of the economy, the year-on-year growth of the total demand was pulled mainly by the external trade. Expenditure on final consumption and fixed capital formation also increased.
In contrast, total inventories decreased, partially also in relation to a gradual sale of stored tobacco products.
The CSU will release revised data on GDP development in Q1 on June 4.