Gross domestic product - 1. quarter of 2004
Economic growth fuelled by capital expenditure
Publication Date: 10. 06. 2004
Product Code: r-5002-04
According to preliminary estimates the GDP for the first quarter increased by 3.1 % at constant prices year-on-year. The contribution of GDP components to the total result varied distinctly. Capital formation expenditure (+ 12.7 %) was growing faster than final consumption expenditure (+2.1 %), and the development of the external balance of goods and services continued to exercise its negative effect: the growth of imports considerably outstripped the growth of exports (+11.3 % and +8.3 %, respectively).
Year-on-year development of the individual GDP components at average prices of the previous year:
· Final consumption expenditure rose in real terms especially due to the growth of expenditure by households (+3.9 %); expenditure by institutions classified to the general government sector dropped by 1.6 %. In nominal terms (current prices), households spent by CZK 15.5 billion (+5.2 %) more than last year, which corresponded to the development of their disposable income (+5.5 %). Expenditure by general government increased by 6.1% primarily due to a rise in nominal wages.
· Development of gross capital formation favourably was affected by both of its components. Gross fixed capital formation increased by 9.5 % year-on-year under the dominant influence of investment in buildings and structures where the 5 %-to-19 % change in VAT anticipated by the investors may have shown itself. Inventories also increased sizeably, compared to the first quarter of 2003: by CZK 17.7 billion this year as against +CZK 11.6 billion in 2003.
· External balance of goods and services was greatly affected by the development of terms of trade. While at current prices it became favourable after a number of years (+CZK 0.9 billion), it changed for the adverse in terms of the previous year’s prices (-CZK 7.2 billion) when the deficit of trade in goods (-CZK 9.3 billion) was only partially offset by the surplus of the balance of services (+CZK 2.1 billion).
At current prices , the first quarter GDP grew by CZK 43.5 billion (+7.3 %) year-on-year.
The quarterly time series of GDP component indicators was revised, following up the revision of annual national accounts published in early May. The latter takes account of the methodological principles requested by the European System of Accounts (ESA 95). At the same time the methodology for the conversion of indicators from current to constant prices was also harmonized. Unlike the concept used before for converting the time series into base year prices (so far 1995 in the CR), another approach is taken, as requested by the Statistical Office of the European Union. As a rule, the indicators are converted into the previous year’s average prices and then chained. This approach depicts better changes in the structure of the individual components.
The revised time series of the quarterly national accounts will be brought out by the CZSO by the end of June 2004.
Note
Contact: Jan Heller, tel. (+420) 274 052 865, e-mail: heller@gw.czso.cz
Related publication: 5001-04 Quarterly National Accounts of the Czech Republic: 1st Quarter of 2004
(also www.czso.cz)