While the Czech public paid little attention to the latest economic data, the time will almost certainly come when it will be impossible to ignore. The outlook for growth for the coming years is decidedly grim, especially given that tax revenues are falling far below expectations, writes Jaroslav Ungerman, chief economist for the Bohemian and Moravian Confederation of Trades Unions (ČMKOS).
Czech gross domestic product dropped 0.8% quarter on quarter in Q1 and 0.7% year on year, in large part due a drop in domestic demand, despite rising exports over the quarter, data published by the Czech Statistical Office (ČSÚ) on Friday showed. The office’s flash estimate of May 15 had indicated a 1% drop in GDP.
European and Czech figures showed a 1.0 percent drop in Czech GDP during the first quarter of the year compared with the previous quarter and the same period in 2011. The shock contraction was explained by a series of special factors by the local statistics office with many analysts expecting upward revisions following the gloomy figures.