Quarterly GDP refined estimate - 2 quarter

In Q2 real gross domestic product adjusted for price, seasonal and calendar effects fell by 5.5% compared with Q2 2008. Total employment dropped by 1,6%. Compared with Q1 2009, gross domestic product increased by 0.1%, however, employment continued to fall (by 1.2%). 
According to available data sources the economic slump measured by the GDP development stopped in the last quarter. After two sizeable q-o-q decreases* - by 1.3 % in the last quarter of 2008 and by 4.8% in the first quarter of 2009, GDP in Q2 saw an intangible increase (+ 0.1%), q-o-q. 
In the year-on-year comparison, GDP in Q2 fell by 5.5 %, which was the biggest decrease from the beginning of existence of the independent Czech Republic. Overall, in the first half of 2009, GDP was 5.0 % down compared with the corresponding period of 2008 (drop in Q1 was updated to 4.5%).
 
On the demand side of the economy the main contributor to stabilization of the overall gross value added (GVA) development, q-o-q, was mainly manufacturing which (after a 9.5% drop in Q1) increased its performance by 1.3%. Important was also the contribution of construction, which, compared with Q1, increased by 2.6%. In contrast, economic performance of trade (incl. repair of motor vehicles, motorcycles and retail sale of automotive fuel) continued to fall by 1.4% and the same applies to electricity, gas and water supply (-12.1%).
In the y-o-y comparison the biggest contribution to the overall GVA came from the slump in manufacturing (by 12.8%). Marked y-o-y decreases were reported for energy (-21.9%), trade (-8.3%), transport (-7.0%) and business activities (-4.2%).
 
The taxes on products including mainly VAT and excise taxes were hardly affected by the total GDP decrease when in the y-o-y comparison the taxes dropped only by 0.6%.
 
In Q2 individual demand components showed rather different contribution to the q-o-q and y-o-y development of economy:

• A 1.9% increase of final consumption expenditure contributed positively by 1.3 percentage point (p.p.) to GDP growth. This growth was contributed to by an increase of household expenditure and general government expenditure. A moderate y-o-y nominal growth of 2.2% in household expenditure was only intangibly affected by consumer price increase and in real terms this expenditure increased by 1.6%. General government expenditure classified in final consumption expenditure increased by 2.7% compared to Q2 2008. An important role was played by increase in costs on health care of health insurance companies. In the quarter-on-quarter comparison, final consumption expenditure rose by 0.2% with the household expenditure raising by 0.3%, while the general government expenditure was by 0.2% down.
• Gross capital formation continued to decline y-o-y. In Q1 a 18.1% drop deepened to 24.9% in Q2. Negative contribution of this expenditure component to GDP development then stood at 6.1 p.p. Gross fixed capital formation was by only 7.2% down, y-o-y, however a sizable drop was recorded in inventories. The fall in inventories at current prices in Q2 was estimated at CZK 32.2 bn, while in the same quarter of 2008 inventories grew by CZK 7.4 bn. Gross capital formation fell by sizable 8.7% q‑o‑q, of which fixed capital fell by 1.2%.
• Surplus of external trade in goods and services at current prices (CZK +56.7 billion) was by CZK 8.5 bn bigger compared to Q2 2008. However, at current prices the total surplus (net exports) was 7.8% down due to significantly different development of export and import prices, y-o-y. Real exports fell by 16.6 % and imports by 17.0 %. The negative contribution of net exports to GDP was 0.7 p.p. In the q‑o‑q comparison in Q2 a positive development was recorded when exports increased by 1.1% while imports fell by 1.6%.

 
Gross domestic product at current prices fell by 2.1%, y-o-y, to CZK 903.0 bn. The overall price level measured by GDP implicit deflator grew by 3.6%.
 
The falling economic performance brought about a decrease of total employment, which, seasonally adjusted, dropped in Q2 by 1.2%, q-o-q and by 1,6%, y-o-y. Total employment in Q2 (according to national accounts methodology) was 5 179 thousand persons, i.e. by 83 thousand less than in Q2 2008.                    
In compliance with changes in data sources in 2007 and 2008 and with the aim to provide most updated information on trends in the development in economic crisis the Czech Statistical Office carried out an extraordinary revision of time series of quarterly national accounts, which is published now. However, the CZSO points out that the quarterly indicators for 2008 will be updated in connection with the entire system of annual national accounts (which is now being completed) and will be published along with quarterly accounts for Q3 on the 9th December. The scope of GDP updates and corrections on a quarterly basis is illustrated in the following table:

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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
Selected tables: http://www.czso.cz/eng/edicniplan.nsf/p/50n1-el 
 

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* Unless otherwise stated all data presented in this news release are adjusted for price, seasonal and calendar effects