Challenges Ahead for Czech Economy as Q1 GDP Declines by 0.5% YoY

The Czech economy decreased by 0.5% year-on-year in the first quarter. The decline is more profound than previously reported by the Czech Statistical Office in May, which reported a year-on-year decrease in the gross domestic product (GDP) of 0.4%. The economy stagnated quarter-on-quarter in the first three months of the year, as confirmed by the CSU on its website on Friday.

In the first quarter, household incomes and consumption decreased. “The total real monetary and non-monetary income of households per capita decreased by 1.2% compared to the previous quarter and by 9.6% year-on-year, which again was due to continuing price growth,” said Vladimir Kermiet, director of the national accounts department at the CSU.

Real household consumption per capita decreased by 2.6% quarter-on-quarter and 7.6% year-on-year.

The household savings rate decreased compared to the previous quarter but increased year-on-year. The investment rate in the household sector decreased quarter-on-quarter compared to the same period last year.

The non-financial corporate sector saw an increase in profit rates quarter-on-quarter and year-on-year but a decrease in the investment rate. The profit rate was 48.6%, 0.2 percentage points higher than in the previous quarter and an increase from 45.5% last year.

The investment rate decreased by 1.3 percentage points quarter-on-quarter to 27.2%, compared to 24.7% last year. Non-financial corporate wage costs increased by more than a tenth year-on-year.