GDP growth ebbs in Q2

GDP reading: The economy lost steam in the second quarter, with GDP growth inching down to 0.3% on a seasonally adjusted quarter-on-quarter basis from an upwardly revised 0.4% rise in the first quarter. Q2’s reading matched the preliminary estimate and was in line with market expectations. On an annual basis, economic growth accelerated to 0.6% in Q2, compared to the previous quarter's upwardly revised 0.4% expansion and marking the best result since Q4 2022; Q2’s result came in above the preliminary estimate.

Drivers: The quarterly slowdown was due to private consumption growth decelerating to 0.2% seasonally adjusted quarter on quarter in Q2 from a 0.8% expansion in Q1. While total employment rose 0.5% in Q2 from the previous quarter, inflation increased, likely capping the improvement. More positively, public spending growth sped up to 1.5% in the second quarter, up from the first quarter's 0.9%. Similarly, fixed investment growth accelerated to 1.9% in the second quarter (Q1: -1.2% s.a. qoq); both results marked over two-year highs. On the external front, exports of goods and services growth improved to 0.6% in Q2 (Q1: +0.1% s.a. qoq). Meanwhile, imports of goods and services growth ticked up to 0.7% in Q2 (Q1: +0.4% s.a. qoq), marking the highest reading since Q4 2022.

GDP outlook: Our panelists have penciled in a stronger quarter-on-quarter GDP expansion for Q3 and a further acceleration for Q4. A continued recovery in purchasing power as wage growth outpaces inflation will lead to private consumption’s rebound this year.

How should you choose a forecaster if some are too optimistic while others are too pessimistic? FocusEconomics collects Czech private consumption projections for the next ten years from a panel of 21 analysts at the leading national, regional and global forecast institutions. These projections are then validated by our in-house team of economists and data analysts and averaged to provide one Consensus Forecast you can rely on for each indicator. By averaging all forecasts, upside and downside forecasting errors tend to cancel each other out, leading to the most reliable private consumption forecast available for Czech private consumption.

Download one of our sample reports to visualize what a Consensus Forecast is and see our Czech private consumption projections.

Want to get access to the full dataset of Czech private consumption forecasts? Send an email to info@focus-economics.com.