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Gross domestic product - 3. quarter of 2006

GDP up by 5.8% year-on-year

Publication Date: 08. 12. 2006

Product Code: r-5002-06




Year-on-year increase of real GDP decelerated to 5.8% in Q3 2006, due to high comparable basis of 2005. Household expenditures on final consumption grew by 4.0%, gross fixed capital formation by 7.2%, exports by 11.4% and imports by 10.6%. Overall price level measured by implicit GDP deflator increased by 2.4% year-on-year.
 
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According to preliminary estimate, real gross domestic product increased by 5.8% year-on-year in Q3 2006. In comparison with Q2 2006, adjusted for seasonal and working day effects, GDP growth was 1.4%. The same quarter-on-quarter seasonally adjusted increases (1.4%) in all the first three quarters of the year show a stabilised economic growth in 2006. In total for Q1-Q3 2006, GDP grew by 6.1% year-on-year.
 
Nominal gross domestic product increased by 8.4% year-on-year in Q3 2006 and reached CZK 813.1 billion; overall price level measured by implicit GDP deflator grew by 2.4%, which is the highest figure since Q4 2004.
 
Among other main total economic indicators (according to national accounts methodology), year-on-year increases were registered for total employment (by 1.5% to 5 095.2 thousand persons) and number of employees (by 1.4% to 4 175.0 thousand persons) as well as for wages and salaries (by 7.0% to CZK 256.8 billion) in Q3 2006.
 
In a link to the national accounts for 2005 published at the start of October, estimates for all quarters of 2005 and first two quarters of 2006 have been updated. They are based on updated data, quarter-on-quarter shifts and corrections of source data. With regard to partial use of model and extrapolation methods, the harmonisation of annual and quarterly national accounts indicators for 2005 had an impact also on the 2006 data. The previous and updated year-on-year indices are shown in the table.

GDP increase, y-o-y,
constant prices
2005
2006
Q1
Q2
Q3
Q4
Year
Q1
Q2
Estimate of 8 September 2006 (%)
105.4
106.1
105.9
106.9
106.1
107.1
106.2
Current estimate (%)
105.4
106.2
106.0
106.7
106.1
106.4
106.0
Change (p.p.)
0.0
0.1
0.1
-0.2
0.0
-0.7
-0.2

 
Year-on-year development in Q3 2006, constant prices (unless otherwise stated):
 
Figures for Q3 2006 testify to the change of development trends of aggregated expenditure components obvious already in the previous quarter. This change is reflected in the contributions of individual components to GDP growth. The contribution of external trade, which was a key source of economic growth from Q2 2004 to Q1 2006, has been decreasing and compensated for by growing effect of expenditures on final consumption and capital formation.
 
Demand side of the economy
 
Household expenditures on final consumption grew by 4.0% year-on-year (constant prices). The highest increases in consumption groups significant in terms of volume were recorded for expenditures on ‘clothing and footwear’ (+13.4%), ‘furnishings, household equipment and routine maintenance of the house’ (+11.2%) and ‘recreation and culture’ (+7.2%). Current price expenditures increased by 6.8% and reached CZK 402.1 billion, disposable income of households grew by 5.7%.
 
Decrease in government expenditures on final consumption by 2.6% was affected, like in the previous quarter, by the high basis of 2005 related to the acquisition of Jas-39 Gripen fighters. Excluding this item, government expenditures would have increased by 1.1% year-on-year. Government expenditures on final consumption at current prices grew by 1.3% and reached CZK 165.5 billion.
 
Year-on-year increase of gross fixed capital formation (GFCF) by 7.2% was a result of heightened investments in transport equipment (+24.9%), other machinery and equipment (+7.1%) and buildings (except dwellings) and other constructions (+6.9%). Investments in dwellings dropped (-6.0%). GFCF at current prices grew by 8.3% and reached CZK 203.8 billion.
 
During Q3 2006 inventories at current prices increased by CZK 24.2 billion in total. The growth is attributable to all kinds of inventories (materials and supplies, finished products, work in progress and goods for resale).
 
The results of external trade were considerably affected by terms of trade figures, which were above zero for the first time since Q2 2004. A key role was played by the year-on-year movement of world prices of energy producing materials and by strengthening of exchange rate of the koruna, especially against the US dollar. Exports at constant prices grew by 11.4% year-on-year (goods +12.8%, services +2.3%), imports by 10.6% (goods +11.8%, services +2.4%). External trade balance at current prices (CZK +11.3 billion) was by CZK 5.1 billion higher year-on-year, but the Q3 2005 result was negatively affected by one-off import of fighters amounting to CZK 5.9 billion.
 
Supply side of the economy
 
Gross value added (GVA) at constant prices broken down by industry increased by 6.1% year-on-year, i.e. by 0.3 percentage points more than GDP. Like in previous quarters, this result was mainly due to ‘manufacturing’ (+13.9%) and ‘wholesale and retail trade; repair of motor vehicles, motorcycles and personal and household goods’ (+11.5%). Agriculture decreased year-on-year in consequence of unfavourable weather conditions (GVA down by 6.4%).
 
According to estimate released by Eurostat on 30 November 2006, EU25 GDP grew by 2.9% year-on-year in Q3 2006, of which euro area GDP by 2.7%. In Germany, GDP increased by 2.8%, in Austria by 3.3%, in Hungary by 3.7% and in Slovakia by 9.8%.




Contact:  Jan Heller, phone (+420) 274 052 865, e-mail: jan.heller@csu.gov.cz
Related time series: /produkty/hdp_ts
Selected tables: http://www.czso.cz/eng/edicniplan.nsf/p/50n1-el