Quarterly GDP refined estimate - 3 quarter

In Q3 real gross domestic product adjusted for price, seasonal and calendar effects fell by 4.1% compared with Q3 2008. Total employment dropped by 2.0%. Compared with Q2 2009, gross domestic product was, by contrast, 0.8% up, however, employment continued to fall (by 0.3%). In total, GDP in the period January – September was 4.3% down, compared to the corresponding three quarters in 2008.
GDP estimate ^*/ for Q3 as indicated in News Releases of 13 November was not changed upon the assessment of more complete sources of information. GDP increased compared to Q2 2009 by 0.8%, but compared to Q3 2008 GDP was 4.1% down. The q-o-q development of GDP showed sizeable differences during the last twelve months. After decreases registered in Q4 2008 and in Q1 2009 (-0.7% and –4.4%, respectively) it grew in Q2 and Q3 2009 (+0.2% and +0.8%, respectively). In total, over nine months GDP was 4.3% down compared to the corresponding period in 2008.

On the supply side of the economy the main contributor to the y-o-y drop of total gross value added (GVA) by 4.0% was in Q3 mainly manufacturing where GVA was 9.0% down compared to the corresponding quarter in 2008. Among other important industries in terms of volume, retail trade remained below the last year’s level (including repair of motor vehicles, motorcycles repair and retail sale of automotive fuel) and so did energy. In the q-o-q comparison GVA increased mainly in financial intermediation and insurance, construction, retail trade, transport and services. In contrast, a decline was reported for manufacturing, in particular for electricity, gas and water supply.

The drop of taxes on products (including mainly VAT and excise taxes) by 1.5%, y-o-y, showed only hardly any effect on the overall GDP development.

In Q3 individual demand components showed rather different contribution to the q-o-q and y-o-y development of economy:

• A 2.6% increase of final consumption expenditure contributed positively by 1.8 percentage point (p.p.) to GDP growth. This growth was contributed to by an increase of household expenditure and general government expenditure. A y-o-y nominal growth of 0.9% in household expenditure accompanied by a 0.4% drop of price deflator resulted in a 1.3% increase of household expenditure in real terms. Real general government expenditure classified in final consumption expenditure increased by significant 5.3% compared to Q3 2008. An important role was played by increase in costs on health care both in hospital services and out-patient treatment which are paid by health insurance companies. In the q-o-q comparison, final consumption expenditure rose by 0.3% with the household expenditure falling by 0.6%, while the general government expenditure was by 2.2% up.
• Gross capital formation continued to decline y-o-y (-23.8%) and was similar to the development in the previous quarter. Negative contribution of this expenditure component to GDP development then stood at 5.7 p.p. Gross fixed capital formation was by only 9.5% down, y-o-y, with a negative impact by 2.3 p.p. on the GDP development. A sizable drop (CZK -32.7 bn) was recorded in inventories, however, the drop was not so sharp as in Q2. Gross capital formation increased by 0.7% q-o-q, of which fixed capital fell by 1.7%.
• Nominal surplus of external trade (net exports) in goods and services at current prices (CZK 65.2 bn) was by CZK 17.0 bn bigger (+35.1%) compared to Q3 2008. However, at constant prices the total surplus (net exports) was only 2.7% up, y-o-y, due to significantly different development of export and import prices. Real exports fell by 7.0 % and imports by 7.5 %. The contribution of net exports to GDP was basically neutral. In Q3, in the q-o-q comparison exports increased by 8.3% while imports by 8.2%.

Gross domestic product at current prices fell by 2.0%, y-o-y, to CZK 905.9 bn. The overall price level measured by GDP implicit deflator grew by 2.2%.

The falling economic performance brought about a decrease of total employment, which, seasonally adjusted, dropped in Q3 by 0.3%, q-o-q, and by 2.0%, y-o-y. Total employment in Q3 (according to national accounts methodology) was 5 196 thousand persons on average, i.e. by 108 thousand less than in Q3 2008 and by 15 thousand less than in Q2.
In compliance with the entire system of annual national accounts published according to the Catalogue of Publications on 1 October on the CZSO web site, the corresponding quarterly indicators were updated. The scope of GDP updates and corrections on a quarterly basis compared with data published on 8 September is illustrated in the following table:

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

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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: /produkty/selected-tables-of-quarterly-national-accounts-4-quarter-i442mlk281