Quarterly National Accounts - 1. quarter of 2008

According to updated estimate, gross domestic product adjusted for price, seasonal and working day effects grew by 0.9% in comparison to Q4 2007 and by 5.3% in comparison to Q1 2007. Seasonally adjusted total employment increased by 0.4% compared to Q4 2007 and by 1.7% compared to Q1 2007.
The slowdown of domestic economic growth indicated by the Czech Statistical Office in the preliminary estimate of 15 May proved founded. According to updated estimate based on more information from statistical surveys and administrative data sources, seasonally and working day adjusted real gross domestic product increased by 0.9% on Q4 2007 and by 5.3% on Q1 2007. (GDP not adjusted for seasonal and working day effects grew by 5.2% year-on-year.) */

The lower rate of GDP growth was mainly due to a markedly lower increase in demand for production for final consumption. Other demand components, i. e. capital formation and external trade balance, continued growing rapidly but they did not fully compensate for the fall in the final consumption rate of growth.

• Year-on-year rise in final consumption by a mere 2.1% in Q1 2008 contributed by only 1.4 percentage points to GDP growth. Both household and government expenditure were the factors of lower growth of total final consumption. The marked nominal growth of 9.8% in household expenditure (the most in the last ten years) was for a large part eliminated by price increase; as a result, real household expenditure grew by only 2.8% (the lowest figure in last ten quarters).
• Government expenditure classified to final consumption expenditure was by 0.7% higher year-on-year (constant prices).
• Growth of gross fixed capital formation by 2.0% was mainly due to investment in machinery, transport equipment and housing; investment in other buildings and constructions decreased year-on-year.
• The balance of external trade in goods and services (current prices) grew by CZK 10.4 billion on Q1 2007; exports and imports at constant prices were up by 13.8% and 12.1% respectively.

Growth of economic performance was affected by increasing employment which rose by 0.4% compared to Q4 2007 and 1.7% compared to Q1 2007 (adjusted for seasonal effects). Not seasonally adjusted employment grew by 1.9% year-on-year. Labour productivity measured by gross value added per employed person increased by 3.6% year-on-year. Employment in the economy (according to national accounts methodology) was 5 197 thousand persons on average in Q1 2008, i.e. by 99 thousand more than in Q1 2007.

Increase in the overall price level measured by GDP implicit deflator by 3.3% was influenced by considerably different trends of domestic prices (mainly consumer prices) and external trade prices (export and import prices), whose impacts partly compensated one for the other. The price deflator of household expenditure (1.067) was affected by a one-off increase in the basic VAT rate from 5 to 9%. According to rough calculations it would have reached 1.055 without the VAT increase. Thanks to appreciation of the koruna against the euro and the US dollar external trade prices decreased. Due to price growth of petroleum products import prices fell less (-3.7%) than export prices (-4.3%), which deteriorated the terms of trade by 0.6 percentage points.

The main contributor to the growth of gross value added (GVA) by 5.4% year-on-year (constant prices) was manufacturing (over 60%) where real GVA increased by 13.6% year-on-year. Rapid increases were observed also in transport (+7.7%), wholesale and retail trade (+4.4%) and business services (+3.5%). GVA in construction and agriculture decreased.

EU27 GDP increased by 2.5% year-on-year in Q1 2008 (according to Eurostat News Release of 3 June); Euro area GDP grew by 2.2%. GDP growth in Slovakia was 8.7%, in Poland 6.4%, in Austria 2.9%, in Germany 2.6% and in Hungary 0.7%.
In compliance with the revision policy, the Czech Statistical Office has carried out the routine revision of annual national accounts for 2005 and 2006. Also corresponding quarterly indicators for 2005 to 2007 were updated. The scope of the revision of quarterly GDP is shown in the following table:
Note: Preliminary GDP estimate for Q2 2008 will be released on 14 August, i.e. one day earlier than mentioned in the Catalogue of Publications. The underlying reason is harmonisation of GDP flash estimates with the Eurostat release calendar.
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*/ Unless otherwise stated, all following data are adjusted for seasonal and working day effects

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Contact: Jan Heller, tel. (+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