Czech Industrial Production Drops in July

According to the Czech Statistical Office (ČSÚ), industrial production in the Czech Republic is slowing down. Industrial production declined by 2.8% YoY in July, the first decline since January. In addition, inter-monthly comparison also showed a significant decrease of 2.6%. This decline is attributed to the more extended summer shutdowns and higher comparative bases in the production and distribution of electricity and gas. Lower demand from the construction industry also impacted the decline in other non-metallic mineral and plastic products’ output.

Even in June, industrial production was already showing signs of slowing down, with a YoY and inter-monthly increase of only 0.9%.

The decline in industrial production is expected to impact the Czech economy significantly. The economic growth rate for Q2 2021 was already slow, at just 1.1% YoY. The decline in industrial production will likely drag down the growth rate further.

Economists are urging the government to take action to boost the economy. One suggestion is to increase spending on infrastructure projects, which could create job opportunities and stimulate demand in the construction industry. However, the government has hesitated to increase spending due to concerns over rising debt levels.

It remains to be seen how the Czech economy will respond to the decline in industrial production. Experts are optimistic that the economy will recover in the year’s second half, but this will depend on various factors, such as the vaccination rate and global economic conditions.