Gross domestic product - 2. quarter of 2004

GDP growth exceeded four per cent

Publication Date: 10. 09. 2004

Product Code: r-5002-04

According to preliminary estimates GDP increased in Q2 by 4.1% at constant prices year-on-year. A higher growth (4.7%) was last achieved in Q4 2000. At the same time the growth of GDP that had been estimated for Q1 2004 was updated from 3.1% to 3.5%, when the new calculation used more accurate data on external trade and from statistical surveys.
Characteristic of the two quarters was that capital expenditure outstripped final consumption in growth. Constant price final consumption expenditure increased in each of the quarters by 2.1%, while capital formation expenditure increased further in Q2, by 13.9% year-on-year, after its marked rise by 13.1% in Q1. Q2 also saw a considerable increase in external trade turnov2er at current prices. In real terms, however, the aggregate balance of goods exports and imports and of services revenue and expenditure was highly affected again by positive development of terms of trade. While at current prices the balance got better by CZK 3.9 billion, it recorded a decrease of CZK 1.1 billion at the previous year’s prices.

Year-on-year development of the individual components of GDP in Q2 at constant prices :
– Final consumption expenditure rose really , particularly due to the growing consumption of households (+3.4%). By slowing down the year-on-year growth of expenditure by 0.6 percentage points in Q2 compared to Q1, the households reacted to a drop in the increase in nominal and real wages.
Nominally, households spent CZK 16.2 billion (+5.1%) more than last year, coping with the problem of possible shortage of resources by raising the share of loan purchases.
Expenditure of institutions coming under the government sector dropped by 1.1%, mainly because of lower wage costs resulting from paying only 10% of the thirteenth pay.
– Expenditure on gross fixed capital formation accelerated further – after the growth over the whole calendar year 2002 by 3.4% on average, acceleration in 2003 by 7.4%, and 9.6% increase in Q1 this year, investments in fixed assets increased in Q2 by 12.8% year-on-year. This was in agreement with statistics on the development of industrial and construction output.
– External balance of goods and services in total was determined by the dynamic development of its two components – exports at current prices were by CZK 111.6 billion (28.3%) and imports by CZK 107.7 billion (26.7%) up on Q2 2003. Really (at current prices of the previous year), the external trade as a whole continued exercising its negative effect on the development of GDP. The growth of export prices (104.2%) still outstripping that of import prices (101.6%) made exports grow slower (23.1%) than imports (24.7%) in consequence.
As far as individual industries are concerned, manufacturing, quarrying and mining and electricity, gas and water supply (with their constant price gross value added 8.1% up year-on-year), trade, transport and construction did best. Agriculture remained below its last year’s level, and selected, mostly non-market services provided primarily by institutions of the government sector dropped, too.
At current prices , GDP grew in Q2 by CZK 53.4 billion (+8.2%) year-on-year. The aggregate price level measured by the implicit deflator of GDP was 4.0 percentage points up on the corresponding period of last year.

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The CZSO has already finished the revision of its time series of selected indicators of annual and quarterly national accounts for the years 1995 to 2003 and assumes the series to be supplemented with selected indicators for 1990 to 1994 by the end of 2004. The revised series gives a consistent picture, in terms of both time and contents, of the development of the economy and also makes it possible to carry out adequate international comparisons pursuant to the methodological principles requested by the European System of Accounts (ESA 1995). The electronic form of the complete time series of quarterly national accounts also including seasonally adjusted indicators will be placed on the CZSO’s website on Monday 13 September.

Note
Contact: Jan Heller, telephone (+420) 274 052 865, e-mail jan.heller@csu.gov.cz

ahdp091004.doc

Annex:

Table GDP development in the 1st half of 2004