Gross domestic product - 2. quarter of 2006

Year-on-year growth of constant price GDP slowed down to 6.2% in Q2 2006; household final consumption expenditure was up by 3.8%, gross fixed capital formation by 5.3%, both exports and imports by 10.2%, and inventories increased markedly too. The overall price level measured by the GDP implicit deflator grew by 1.4% year-on-year, which is the highest figure in last five quarters.
According to preliminary estimates, constant price gross domestic product in Q2 2006 increased by 6.2% year-on-year. In comparison to Q1 2006, seasonally adjusted and working days adjusted GDP grew by 1.2%. In total for the first half of the year, GDP was higher by 6.6% year-on-year; the Q1 2006 estimate (+7.4%) was revised to 7.1%.

Year-on-year development in Q2 2006 at constant prices (unless otherwise stated):

On the demand side of the economy, the contributions of the basic expenditure components to the economic growth were very differentiated.

Compared to Q2 2005, household final consumption expenditure increased by 3.8% at constant prices. The implicit deflator growing by 2.7%, current price expenditure increased by 6.6% and reached CZK 381.7 billion. Nominal disposable income grew slower in Q2 2006 (+6.1%), but households had available for the first time also financial resources generated in Q1 2006 through reduced tax burden on natural persons (introduction of spouses’ joint taxation and higher percentage of lump sum expenditure).

A decrease of final consumption expenditure in the general government sector (-3.4%) was due to a high comparable basis of 2005 affected by inclusion of Jas-39 Gripen fighters (amounting to CZK 4.4 billion).

Increase in gross fixed capital formation (GFCF) by 5.3% was related to renewed dynamics of construction output and equipment of large industrial plants with machinery and equipment. Broken down by sector, the highest investment in GFCF was recorded for non-financial corporations (64.5% of the total of CZK 208.2 billion, current prices), followed by general government (17.6%) and households (15.4%). By type of goods, 37.1% of the total was invested in non-residential buildings and structures, 31.5% in machinery and equipment, 15.8% in transport equipment and 10.7% in dwellings.

Current price inventories grew by a significant amount of CZK 38.5 billion, especially due to a substantial increase of work in progress on large construction projects and increase in inventories of trading goods.

The result of external trade was affected by the development of the world energy raw material prices like in the preceding quarter. A year-on-year increase of 10.2% at constant prices was recorded for both exports (goods +12.3%, services -4.7%) and imports (goods +11.5%, services +1.0%). Terms of trade worsened year-on-year by 1.5 percentage points influenced trade balance in a negative way by CZK 7.0 billion at current prices.

On the supply side of the economy, constant price gross value added (GVA) broken down by industry grew by 6.6%, which was by 0.4 percentage points more than GDP. This figure was mainly affected, like in the previous quarters, by manufacturing (GVA +18.6%, constant prices).

Current price GDP increased by 7.6% year-on-year and reached CZK 815.7 billion, the overall price level measured by the GDP implicit deflator grew by 1.4% (growth in the previous four quarters was always below one per cent).

Among other key macroeconomic aggregates (national accounting methodology), on the increase were both total employment (+1.1% to 5 014.9 thousand persons) and total wages and salaries (+8.2% to CZK 255.9 billion).

According to estimate released by Eurostat on 1 September 2006, EU25 GDP was up by 2.8% year-on-year in Q2 2006 (+2.4% in Q1 2006), of which by 2.4% in Germany, 3.1% in Austria, 3.9% in Hungary, 5.6% in Poland and 6.6% in Slovakia.

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Contact: Jan Heller, phone (+420) 274 052 865, e-mail: jan.heller@csu.gov.cz
Related time series: /produkty/hdp_ts