GDP resources and uses - 1st quarter of 2013

The drop of the gross domestic product in the Q1 2013 was by 0.3 percentage point deeper according to the refined estimate than the preliminary estimate signalled. The GDP decreased by 2.2%, year-on-year, and by 1.1%, quarter-on-quarter.

In the Q1 2013, according to the refined estimate, the gross domestic product (GDP) adjusted for price effects and seasonally adjusted ^*/decreased by 2.2%, y-o-y, and by 1.1%, q-o-q. The preliminary estimate published on 15 May expected the GDP decrease by 1.9%, y-o-y, and by 0.8%, q-o-q. Performance of the economy measured by the development of the gross domestic product is continually decreasing for six quarters already. The actual GDP is by 2.9% lower than in the Q3 2011, when it achieved its last maximum. A deeper decrease, by 5.6%, which, however, lasted only for three quarters, affected the Czech economy on the turn of the 2008 and 2009.

Demand components

The y-o-y decrease of the total final consumption expenditure (which lasted continually for seven quarters) stopped, because household expenditure by 0.5% lower was fully compensated by an increase in the general government expenditure.

- Household expenditure by purpose partially changed compared to Q1 2012. Consumers showed higher interest in some durables, especially household equipment, transport equipment, and audio-visual equipment, increase at which was positively contributed to by a drop of prices. On the contrary, non-durables, for example food and beverages, were bought by households less than a year before.
- Expenditure by the general government increased by 1.1% in the Q1 2013 (after decreases in 2011 and 2012 by 2.7% and 1.2%, respectively).

Capital formation, which decreased by 8.7%, y-o-y, was in the Q1 basically the only reason for the decrease of the total demand.

- Fixed capital formation was decreasing, y-o-y, for seven quarters already. Now it was contributed to mainly by a y-o-y decrease in purchases of machinery and equipment (along with long-term decreasing investments to dwellings and other buildings and structures), which was, however, caused to considerable extent by a high base of the last year.
- Capital formation was negatively influenced by development of inventories, which decreased during the Q1 at current prices by CZK 20.0 billion (seasonally unadjusted), while in the corresponding quarter of 2012 it was only by CZK 11.6 billion. Besides standard annual decrease in inventories in energy industry (by CZK 11.3 billion in the Q1) inventories decreased mainly in wholesale trade (by CZK 5.5 billion), at production of tobacco products (by CZK 2.2 billion), and in food industry (by CZK 1.8 billion).

In Q1, there was an important change in the external trade development and its contribution to the GDP formation. Decreasing external demand was gradually reflected in export possibilities of the Czech economy. After more than three years, the total exports and imports of goods and services now decreased by 2.1%, y-o-y; also active balance decreased and external trade had no longer a positive effect on the GDP development.

Structure of the supply

Economic recession both in the Czech Republic and abroad and related to that demand development had negative influence on the gross value added (GVA) generation mainly in manufacturing, the y-o-y decrease of which by 2.4% was crucially contributed to by manufacture of transport equipment. Also the following industries recorded much worse results than in the corresponding period of the previous year: wholesale trade, agriculture, energy, telecommunications, and health. In total for all industries (CZ-NACE activities), the GVA was lower by 2.1%, y-o-y, and compared to the Q4 2012 it was lower by 0.5%.

The GDP development was negatively influenced by taxes on products; their volume was lower by 2.5%, y-o-y, and even by 5.4% lower in the q-o-q comparison. The drop was to a large extent caused by stocking up by tobacco products, because extraordinarily high revenue from the relevant excise tax in the Q4 2012 resulted in a much below-average income in the Q1 2013. That anomaly influenced mainly the q-o-q drop of GDP, which would be otherwise only 0.7% (not counting the anomaly).

In the Czech Republic, in average 5 064 thousand persons were employed in the Q1 (in terms of national accounts), which was by 1.1% more than a year before. An increase was recorded (except for construction and agriculture) by basically all important industries. The overall price level increased by 1.3%, y-o-y, in which final consumption expenditure by 0.6%, exports by 1.2%, and imports by 0.2%.
The Czech Statistical Office informs that in accordance with the Catalogue of Products it will publish on 28 June 2013 the set of national accounts for the Q1, which will reflect refinements based on administrative data sources that were not available on the date of the actual estimate. Therefore, further partial corrections of indicators published now may occur.
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^*/ Unless otherwise stated, all data presented in this news release are adjusted for price, seasonal, and calendar effects.


Contact person: Jan Heller, Director of the Quarterly National Accounts Department, phone number (+420) 274 052 865, e-mail: jan.heller@csu.gov.cz
Used data sources updated as at: 31 May 2013
Related CZSO web page: /produkty/hdp_ts
Next Release will be published on: 28 June 2013 (national accounts for the first quarter of 2013)