Gross domestic product - 1. quarter of 2005

Q1 2005

According to preliminary estimates constant price GDP increased in Q1 2005 by 4.4% year-on-year. Having been adjusted for seasonal variations and the number of working days, the GDP growth was 1.1% up on Q4 2004.

The growth was primarily fuelled by the development of external trade where the year-on-year increase in the exports of goods (+19.5%) outstripped the increase in the imports of goods by a total of 6 percentage points. Trade balance surplus (CZK 22.8 billion at current prices or CZK 27.3 billion at average prices of 2004) had been the highest since the independent Czech Republic came into being. Gross fixed capital formation continued to grow year-on-year, though at a slower rate (+5.5%), the growth slowdown being mainly due to the high reference basis in 2004. Final consumption failed to reach its last year’s level (a drop of 0.2%)—expenditure by households grew slightly year-on-year (+1.3%), but expenditure by general government was lower by 3.8% year-on-year. While inventories increased in Q1 2005 by CZK 4.3 billion, the corresponding period of the previous year saw their increase about twice as much.

On the supply side, trade and services in particular—industries significant in terms of weight—made the biggest contribution to the GDP growth. Gross value added in manufacturing, though, increased less (+1.3%) than in previous years, and the construction even dropped (-3.7%) below last year’s level (-3.7%). The last year’s high reference basis was a common denominator here, too.

Current price GDP grew by 5.8% year-on-year only, which translates into the smallest growth over last one year and a half. However, the change in the constant price GDP was heavily affected by differentiated developments in individual price areas, which led to the lowest GDP deflator year-on-year growth over last five years (+1.3%).

Revision of the indicators for 2003 and 2004 and new outputs

The regular updating of estimates of quarterly GDP developments follows up detailed and fully balanced results provided by annual national accounts. The annual national accounts have been already compiled for 2003 with the use of newly processed input data and are supposed to be published at the end of June. The time series of selected quarterly indicators being newly brought out is based on these accounts.

The estimate of the year-on-year real growth of GDP for 2003 was decreased from the original 3.7% to the new 3.2% and that for 2004 was raised from 4.0% to 4.4%. The growth figures for GDP in individual quarters also received revisions, the results being 2.4%, 3.1%, 3.6%, and 3.6% for the year 2003 and 4.1%, 4.5%, 4.6%, and 4.6% for the year 2004. Comprehensive results of the revision of the time series of quarterly indicators are available on the CZSO Internet website.

New quarterly outputs are being brought out for the first time: GDP by income approach, employment and wages by industry and gross fixed capital formation by type of goods. The CZSO is also releasing its time series of the real gross domestic income indicator that eliminates, unlike the GDP, the impact of changes in terms of trade.

Contact: Jan Heller, phone: (+420) 234 652 175, e-mail: heller@gw.czso.cz

Related publication: 5001-05 Quarterly National Accounts of the Czech Republic, 1st quarter of 2005;

(also /ep-5)