Czech Economy Grew By 7.8%

The Czech Republic’s gross domestic product increased by 7.8 %. The performance of the Czech economy grew by 0.6 % compared to the previous quarter. This is according to a preliminary estimate published by the Czech Statistical Office on Friday.

This is the highest year-on-year increase in gross domestic product ever recorded by the domestic economy. However, the result should be taken with some caution, as it was affected by last year’s most profound annual decline. The effect of the previous year’s low comparative base is thus at work here. According to the statistics, economic growth was driven mainly by foreign demand and investment.

In any case, this is good news. The Czech economy contracted in the first quarter by 2.1% and 0.3% year-on-year and quarter-on-quarter, respectively. It has now breathed a sigh of relief after a strong recovery that could continue for the rest of the year.

Diverse estimates of full-year growth

Gross domestic product growth for the Czech Republic is estimated to be between 1.2 % and 4.5 % this year, depending on which institution is behind the forecast. The most pessimistic is the Czech National Bank, which expects economic growth of only 1.2 % this year.

On the other hand, the highest growth is attributed to the Czech Republic by the European Commission, according to which gross domestic product should increase by 4.5 %. The Ministry of Finance estimates growth at 3.1 %, the Organisation for Economic Cooperation and Development at 3.3 %, and the International Monetary Fund at 4.2 %