The first estimates from mid-May spoke of a year-on-year decrease of 2.2 percent and a quarter-on-quarter decrease of 3.6 percent, and two weeks later the office improved the estimate to a decrease of two percent and 3.3 percent, respectively.
This is the largest decline in the Czech economy since the beginning of 2010, the CZSO said earlier. The results were affected by the coronavirus pandemic and associated restrictive measures. In the last quarter of last year, gross domestic product grew by two percent year on year, then rose by 0.4 percent quarter on quarter.
“The extraordinary situation in March was reflected in a decline in the profit rate and the investment rate for non-financial corporations. The investment rate fell by 3.9 percentage points quarter-on-quarter, which is the largest decline in the history of measurement, “said Vladimír Kermiet, Director of the CZSO National Accounts Department. Households also saw an increase in income and consumption, he added.
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“The Czech economy does not expect easy times in the coming months. A substantial part of April was still in force quarantine measures, which means longer downtime and difficult production conditions. However, even after the restrictions are released, returning to normal operation will not be easy. Therefore, it can be expected that the economic performance in the second quarter will be hit even more severely and the decline in GDP will most likely reach double-digit values, “added Raiffeisenbank analyst Luboš Růžička.
He added that during the second half of the year, the economic situation should gradually begin to normalize. “However, we assume that the return to pre-crisis levels will be long-term and will probably take several years. In summary, we expect the economy to decline by 7.6 percent this year, next year the situation should be much better and the growth dynamics should increase significantly, “said Růžička.
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The sum of real monetary and non-monetary household income per capita increased by 2.9 percent in the first quarter compared to the previous quarter, as well as year on year. Real household consumption per capita grew at a slower pace, quarter on quarter, by 2.1 percent. It was 0.9 percent higher year-on-year.
The average monthly income from employment in the 1st quarter reached 35,658 crowns, compared to the previous quarter it decreased by 3.6 percent in real terms, it increased by 0.7 percent year-on-year.
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