Gross domestic product - 4. quarter of 2007

 
Real gross domestic product in the fourth quarter of 2007 was up by 6.6% year-on-year and employment grew by 1.9%. In total for the year 2007, real GDP increased by 6.5% and average employment was by 1.8% higher in comparison to 2006.          
Economic growth measured by gross domestic product continued also in Q4 2007 when real GDP grew by 6.6% year-on-year. The GDP preliminary estimate of 15 February 2008 was decreased by 0.3 p.p. In total for the year 2007, GDP increased by 6.5% year-on-year, i.e. by 0.1 p.p. less than the preliminary estimate suggested. Growing economic performance was connected with increasing employment. According to an estimate, employment in Q4 2007 was by 1.9% higher than in Q4 2006; on average for the year 2007, the increase was 1.8% compared to 2006.
 
Adjusted for seasonal effects and working days, GDP in Q4 2007 grew by 1.7% on Q3 2007 and employment increased by 0.6%. Compared to Q4 2006, seasonally adjusted GDP rose by 6.6% (employment by 1.9%).

 
Fourth quarter of 2007 (constant prices)
 
In Q4 2007 GDP by production and expenditure approach was affected by several one-off factors. This predominantly applied to increased performance of the health industry which resulted in higher expenditures of health insurance companies, and more intensive repair of road network with the impact on final government consumption expenditure. A total rough estimate by the CZSO says that without these effects GDP in Q4 2007 would have grown by 6.0%.
 
On the supply side of the economy the total increase of 6.8% in gross value added (GVA) at constant prices was mainly due to manufacturing (contribution 2.7 p.p.), wholesale and retail trade; repair of motor vehicles, motorcycles and personal and household goods (+2.4 p.p.) and financial intermediation and business activities (+1.3 p.p.).
 
Aggregate demand grew thanks to all three basic expenditure components – final consumption expenditure (contribution 2.6 p.p.), gross capital formation (+2.0 p.p.) and external trade balance (+2.0%).
As regards final consumption expenditure which grew by 3.7% year-on-year, the diminishing contribution of household expenditure to GDP growth was substituted by the contribution of government expenditure (see more above).
Gross fixed capital formation increased by 8.0%; change in inventories was very low and actually without any effect on GDP.
The contribution of external trade was due to exports of goods and services growing markedly faster (+12.5% year-on-year) than imports (+10.2%). A higher contribution of external trade to GDP growth was previously recorded in Q4 2005.
 
 
Year 2007 (constant prices)
 
Gross domestic product, regarded as the most comprehensive indicator of economic development, is estimated to have grown by 6.5% year-on-year in 2007 (at constant prices). This is the highest figure in the history of the independent Czech Republic. The main factor was increase of gross value added by 6.4%; taxes on products were a component source of growth. Nearly third of the total GVA increase was due to year-on-year growth of total employment (+1.8%), and more than two thirds due to increase in aggregate labour productivity.
 
On the supply side of the economy the growth of total gross value added resulted especially from manufacturing (increase by 11.1%) which contributed by 3.0 p.p. to GVA growth. Wholesale and retail trade, restaurants and transport contributed markedly (+2.5 p.p. in total), financial intermediation and business activities less (+1.7 p.p.). Year-on-year GVA decreases (at constant prices) were registered mainly in agriculture and energy industry.
 
The contributions of individual demand components to increase of total economic performance differed. Total final consumption expenditure grew by 4.2% against the year 2006 (contribution 2.9 p.p.) and gross capital formation by 9.2% (contribution 2.5 p.p.). Exports growing more rapidly (+14.5%) than imports (+13.7) contributed to total GDP growth by 1.1 p.p.
Household final consumption expenditure increased by 5.7% year-on-year at constant prices and by 8.7% at current prices, the overall price level of this demand component thus grew by 2.8%.
Gross fixed capital formation was higher by 6.1% (at constant prices); on the increase were investments in transport equipment (+8.6%), machinery and equipment (+7.9%), dwellings (+7.2%) and other buildings and structures (+4.8%).
Inventories went up again in the year 2007, in total by CZK 105.4 billion (at current prices).
In external trade, total exports and imports grew by 14.7% and 12.5% respectively (at current prices). Surplus was achieved in both trade balance (+CZK 117.5 billion) and balance of receipts and expenditures on services (+CZK 48.4 billion). Growth of export prices (by 0.2%) and decrease of import prices (by 1.0%) improved terms of trade by 1.2 p.p.
 
Nominal gross domestic product increased by 10.1% and reached CZK 3 557.7 billion in the year 2007. The overall price level measured by GDP implicit deflator grew by 3.4% year-on-year; in final consumption expenditure it was higher by 3.0% and in gross capital formation by 1.6%.
 
Average total employment (national accounts approach) was 5 171.8 thousand persons in the year 2007, of which 4 230.2 thousand persons were employees; their wages and salaries amounted to CZK 1 136.3 billion. 
EU27 GDP adjusted for seasonal effects increased by 2.6% year-on-year in Q4 2007 (according to Eurostat News Release), GDP in the US was up by 2.5% and in Japan by 1.8%. Among the Czech Republic’s main trading partners, in Q4 2007 GDP grew in Slovakia (+14.3%), Poland (+6.7%), Germany (+1.8%) and Hungary (+0.6%).  
Please note again that, starting from GDP preliminary estimate for Q1 2008, the Czech Statistical Office will accept the standard concept of GDP presentation applied by Eurostat and GDP adjusted for seasonal and working day effects will be published as the key figure.

---

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