Czech GDP up 3 percent in 2018

The rate of growth slowed significantly from 2017

The Czech gross domestic product rose 3.0 percent in 2018, according to preliminary figures from the Czech Statistical Office (ČSÚ).

Figures are adjusted for price, seasonal and calendar effects.

“Domestic demand contributed significantly to [GDP] growth, especially the gross fixed capital formation and final consumption expenditure of households,” the ČSÚ stated in a press release.

The growth, while slower than in 2017, surprised analysts who had predicted 2.8 percent for the year, due to pressure from economic factors from abroad.

Increased spending by the public sector, boosted by EU funds, also helped to add to the growth.

The biggest contributors to the growth of the gross value added (GVA) were economic activities of industry and economic activities of trade, transportation and storage accommodation, and food service activities. GVA increased highly also in construction and in information and communication.

The performance of the Czech economy increased at the end of the year with a higher growth rate than in the previous quarter. In the quarter-on-quarter comparison, the GDP growth rate was the highest for the last six quarters.

In the fourth quarter of 2018, the GDP increased by 1.0 percent compared to Q3 and by 2.9 percent, year-on-year. The GDP growth in the Q4 was driven mainly by external demand. Also, domestic demand for investment goods contributed significantly to the growth, the ČSÚ stated.

Employment increased by 1.6 percent in 2018. In the Q4 2018, employment was 0.4 percent up compared to the previous quarter and 1.5 percent, year-on-year.

Experts have warned that a lack of skilled labor may become a drag on economic growth, as some industries cannot fill key vacancies.

In 2017, the Czech GDP rose 4.5 percent, driven by external demand and consumption expenditure of households. In 2016 it rose 2.3 percent.

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