GDP Resources and Uses - 4th Quarter of 2018

The Czech economy performance in the end of 2018 was growing faster than in the preceding quarters. The gross domestic product (GDP) adjusted for price effects and seasonally adjusted[1] in the Q4 was by 0.9% higher than in the previous quarter and compared to the corresponding quarter of 2017 it was 2.8% up.

The gross value added (GVA) increased in the Q4 2018 by 1.1%, quarter-on-quarter (q-o-q), and by 3.0%, year-on-year (y-o-y). Manufacturing contributed the most to the y-o-y growth of the GVA (0.7 percentage point (p. p.)); it was mainly owing to manufacture of motor vehicles and manufacture of electronic and optical products. A group of economic activities of trade, transportation and storage, accommodation and food service activities contributed also in the same amount. Performance of manufacturing increased by 1.6%, q-o-q, and by 2.6%, y‑o‑y. Construction, in which the GVA increased by 0.8%, q-o-q, and by 7.9%, y-o-y, and information and communication (2.8% up, q-o-q; 7.1% up, y-o-y) were also successful.

On the demand side, the economy growth in the Q4 was driven by both the domestic and external demand. The y-o-y growth of GDP (2.8%) was significantly contributed to by investment expenditure (2.0 p. p.[2]) and government expenditure (0.9 p. p.). Compared to previous quarters, there was a higher contribution of external demand (0.9 p. p.) in the end of the year.

Consumption expenditure of households on goods and services increased by 0.2%, q-o-q; in the y-o-y comparison it was 2.2% up. Fixed capital formation in the Q4 was by 0.2% lower, q-o-q, however, in the y-o-y comparison it kept its high growth of 10.1%. Investment expenditure went mainly to construction investment and machinery equipment.

The balance of external trade in goods and services at current prices reached the value of CZK 87.7 bn. Exports increased in real terms by 2.6%, q-o-q (5.0%, y-o-y); imports increased by 1.4%, q-o-q (5.7%, y-o-y). The growth of exports was driven mainly by trade in electronics and transport equipment. Subdeliveries for electronic and optical products and for machinery and equipment markedly contributed to the growth of imports.

As for the price development in the Q4 2018, the total GDP deflator reached 2.3%, y-o-y.

The volume of labour costs[3] increased by 8.2%, y-o-y, in the Q4 2018.

Total employment[4] increased by 0.4% compared to the previous quarter and in the y-o-y comparison it was by 1.5% higher.

GDP resources and uses in 2018

The GDP for 2018 was by 3.0% higher than in 2017. Domestic demand, especially investment activity, was the key factor of the year-long growth. Gross fixed capital formation contributed 1.9 p. p., household consumption contribution was 1.0 p. p., and the contribution of the general government expenditure was 0.7 p. p. The contribution of external demand to the GDP growth was 0.4 p. p.

The GVA in 2018 increased by 3.1% compared to the previous year. The economic growth has been reported by almost all economic activities of the Czech economy. The contribution of manufacturing to the GVA growth was 0.9 p. p., of a group of economic activities of trade, transportation and storage, accommodation and food service activities it was 0.8 p. p., and contribution of information and communication was 0.4 p. p. The GVA in manufacturing increased by 3.4%. Construction was very successful; it reported the highest growth for the last 14 years (6.7%); it was followed by information and communication (6.7%) and financial and insurance activities (6.7%).

GDP development (%)

GVA development (%)

Final consumption expenditure of households increased for the entire year of 2018 by 3.1%, y-o-y. Gross fixed capital formation was by 10.1% higher than in 2017. Increased investments went to buildings and structures, machinery and equipment and transport equipment. External trade balance decreased at current prices by CZK 49.8 bn, y‑o‑y, to CZK 331.9 bn; exports increased in real terms by 4.5% and imports by 6.0%.

The price level measured by the GDP deflator increased by 2.3%, y-o-y.

The volume of labour costs increased at current prices by 9.5%, y-o-y.

Total employment increased by 1.6%, y-o-y, to 5 430 thousand persons. In total, there were by 2.0% more hours worked than in 2017.