The Czech Statistical Office will publish a preliminary estimate of GDP for the second quarter of 2020 on Friday 31 July. The CZSO will publish the data for the first time according to the new scheme, ie 14 days earlier than usual. “Apart from the undeniable advantage of earlier information about the economy, however, the data may be burdened with higher uncertainty, which is currently doubly true,” said Jiří Polanský, an analyst at Česká spořitelna.
Economic experts expect a quarter-on-quarter decline of 7.4 to 14 percent. Currently, according to analysts, it can already be observed that the economy is rebounding from the bottom.
GDP will fall by 7.5 percent if the Czechia does not catch the second wave, according to banks |
“It is clear that due to the coronavirus pandemic and the consequences of restrictive measures against its spread, the year-on-year and quarter-on-quarter economic downturn will be unprecedented and historically highest,” said Jakub Seidler, ING’s chief economist.
He noted that similar developments are expected in other coronavirus-affected countries. “The German economy is estimated to fall by nine percent quarter on quarter, and the year-on-year decline will exceed ten percent. In France, a quarter-on-quarter decline of 15 percent is expected, and even a fifth year-on-year, “he said.
Services, trade and transport bear the coronary crisis hard
According to Deloitte’s chief economist David Marek, industry, trade, transport, hospitality and accommodation contributed most significantly to the decline in Czech GDP.
“On the demand side, a decline in household consumption, investment and a negative contribution from foreign trade can be expected in the second quarter. Government spending, on the other hand, rose. On the supply side, industry and the part of the services sector that was most affected by the epidemiological measures will show a significant decline, “said Miroslav Novák, an analyst at Akcenta.
Raiffeisenbank’s chief economist Helena Horská pointed out that the economy depreciated about 180 billion crowns in the second quarter. “Losses on sales can be up to 1.5 times, ie 305 billion crowns. So far, the state has poured around 120 billion crowns into the economy, “she added. She added that according to leading indicators, the economy began to rebound from the bottom in the third quarter.
“The fact that the year-on-year decline in GDP will deepen in the second quarter is almost clear, it is only a question of whether it will be double-digit or not. Monthly data are optimistic. The higher collection of value added tax also shows that the recovery in economic activity was faster than expected in May and June. Confidence in the Czech economy is also increasing. The decline in GDP in the second quarter would not have to be deeper than ten percent, “said Komerční banka economist Martin Gürtler.
In the first quarter, the Czech economy fell by two percent year on year. Compared to the previous quarter, GDP was lower by 3.4 percent. This was the largest decline in the Czech economy since the beginning of 2010.
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