In 2014, the Czech economy did well. All reports have forecasted the same for 2015. The publication of the Czech Statistical Office dealing with the development of the Czech economy in the first quarter of 2015 confirms it. So how well did we do after all?
In the first three months of this year, the Czech gross domestic product (GDP) increased (in real terms) by 4.2% compared to the same period last year. It is the strongest growth since 2007. According to the y/y GDP measure, the Czech Republic (together with Romania) has the fastest growing economy in the entire European Union.
As pointed out by the Czech Statistical Office, exceptionally strong growth is partly affected by a low comparative base in the first quarter of 2014 (uneven collection of excise taxes on tobacco products in 2014); however, the growth still remains on the level 3.8% after the adjustment. The positive trend is confirmed by the quarter/quarter development – compared to the last quarter of 2014, GDP increased by 3.1%.
The growth of 4.2% contributed to all major domestic components of the aggregate demand in the Czech Republic – a change in inventories added +2,2 percentage points, a growth in household expenditures covered +1.4 p.p., government expenditures participated with +0.3 p.p., investments into fixed capital +0.8 p.p.. A reduction to the 4.2% growth rate was caused by the negative contribution of foreign trade (net exports), which declined by 0.5 percentage points.
Considering a sector structure of the Czech economy, the most successful segments were manufacturing industry, services (particularly trade, transport, accommodation and catering) and construction. On the other hand, activities linked to the public sector (public administration, defense, activities in the field of education and social welfare) distended as well.
Positive news come also from the labour market. The number of employed persons increased by 1.1%, which is the best result since 2008. The unemployment rate (5.8%) is four percentage points below the EU average (9.8%). Moreover, the Czech economy additionally generated more new positions – at the end of March, over 76,000 vacancies were available – twice more than a year ago.
Let’s just hope that such good economic news will continue throughout the rest of 2015.