Ceska Narodni Banka : M. Mora – Economic outlook for the Czech Republic

Economic outlook for the Czech Republic

Marek Mora

Deputy Governor

Czech National Bank

Virtual Client Meeting

Deutsche Bank Prague, 25 November 2020

Annual GDP growth structure

(annual percentage changes; contributions in percentage points; seasonally adjusted)

• The Czech economy was hit hard by the Covid-19 pandemic and related containment measures
• GDP annual growth will be negative till 1Q 2021
• Only government consumption will make a positive contribution to GDP growth in 2020
• The other components will resume positive contributions next year

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Selected indicators in levels

(CZK billions; constant prices; seasonally adjusted)

GDP							Household consumption
1350							650
1300							630
							610
1250
							590
1200							570
1150							550
I/16	I/17	I/18	I/19	I/20	I/21	I/22	I/16	I/17	I/18	I/19	I/20	I/21	I/22

Gross capital formation					Exports of goods and services
380							1200
360							1100
340							1000
320							900
300							800
280							700
I/16	I/17	I/18	I/19	I/20	I/21	I/22	I/16	I/17	I/18	I/19	I/20	I/21	I/22

• Despite a recovery in household consumption and exports, the economy will not converge to its pre-crisis level until the end of 2022
• The second wave will primarily affect domestic demand - most of all private investment activity
• All depends on the course of the pandemic!

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Impact of pandemic into gross value added

(changes in level in %; impacts in pp; Feb. 2020=100)

• Anti-epidemicmeasures of the 2nd wave will hit trade and services the hardest, while manufacturing will be hit less than in spring 2020
• The adverse effects of the 2nd wave will have dissipated by mid-2021 and the sectors affected will return to the August 2020 level

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