Czech GDP grows faster in Q4 than original estimate


06.03.2014 10:09

Prague - Czech economy grew faster in the last quarter of 2013 than the original estimate as GDP increased by 1.9 percent against the previous quarter and by 1.3 percent year on year, according to updated information made public by the Czech Statistical Office (CSU) today.


Peníze, bankovky, česká měna, koruna, úspory - ilustrační foto. ČTK Zavoral Libor

In the whole of last year, GDP contracted by 0.9 percent, which is also a better figure than the original estimate.

"We saw such a high quarter-on-quarter growth the last time at the beginning of 2007 when the outlook was rosy," Raiffeisenbank analyst Michal Brozka commented on the data.

According to CSU estimate from February 14, GDP grew by 1.6 percent quarter on quarter and by 0.8 percent year on year in the last quarter of 2013. For the whole year 2013, the statisticians put the fall of the economy at 1.1 percent at that time.

According to available data, Czech GDP in the last quarter of 2013 grew the fastest from the EU countries against the previous quarter.

However, the yr/yr and especially qtr/qtr development of GDP was substantially influenced by uneven collection of excise tax on tobacco products, the statisticians said.

"Stocking-up by tobacco products in the end of the year and related to that duty to pay the relevant excise tax increased in the given quarter the GDP at the expense of the following one or two quarters," they remarked.

Brozka noted that GDP would have probably been growing even without one-off factors like forex interventions and higher excise duty.

"But these one-off factors cause that the figure is artificial to a certain extent," he said.

This is why the GDP data have to be taken with a pinch of salt. "But I would consider them as positive in the sense that Czech economy continues growing - nothing more and nothing less," Brozka added.

CSOB analyst Petr Dufek also pointed out that the last quarter of 2013 was exceptional due to extraordinary influences.

"With respect to the strong influence of taxes [and inventories], it makes no sense to be too happy about the nearly 2 percent growth in the fourth quarter. It is certainly pleasant that the economy has managed to get out of recession and it is also positive that consumption and investments are not falling," Dufek said.

The yr/yr fall in GDP by 0.9 percent was mainly the result of a decrease in investments in fixed assets, even despite their partial recovery in the fourth quarter, the statisticians said.

Formed fixed assets were lower by 3.3 percent compared to 2012, especially due to fall of investments of construction character.

"Also investments in machinery equipment and transport equipment were lower than a year before," the CSU said. Gross capital formation was lower by 4 percent yr/yr in 2013.

Final consumption expenditure of households as well as the active balance of external trade were stagnating in the total for the entire year.

Final consumption expenditure of general government influenced the GDP development in a slightly positive way. It increased by 1.9 percent yr/yr, the CSU said.

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