Prague - Czech economy stagnated in Q2 quarter-on-quarter, while analysts expected a 0.3 percent growth and annual gross domestic product (GDP) rose by 2.6 percent, the Czech Statistical Office (CSU) said in the first preliminary estimate today.
A drop in revenues from excise duty on tobacco products due to stocking up on tobacco at the end of 2013 is behind the quarter-on-quarter stagnation, the CSU said.
The economy of the Czech Republic´s main trading partner, Germany, contracted by 0.2 percent in the second quarter compared with Q1, according to data released today. It was a worse-than-expected result.
Czech economy expanded by an annual rate of 2.9 percent in Q1 and by 0.8 percent in a qtr/qtr comparison.
Komercni banka analyst Jiri Skop said before the release of the CSU´s estimate that "the economy will continue expanding in the second quarter. We expect a positive contribution from industry and private services," Skop said.
The annual growth was largely influenced by the continuing recovery in manufacturing industry in the second quarter, the CSU said.
Manufacture of transport equipment and of rubber and plastic products was doing very well.
On the other hand, gross value added decreased year-on-year in financial intermediation services, statisticians said.