GDP resources and uses - 2nd quarter of 2013

Quarter-on-quarter growth of the GDP refined to 0.6%

The gross domestic product in the second quarter was by 1.3% lower, year-on-year (y-o-y), says the refined estimate, yet it increased by 0.6% compared to the previous quarter.

According to the refined estimate, the gross domestic product (GDP) adjusted for price effects and seasonally adjusted ^*/ decreased by 1.3%, y-o-y, in Q2 2013. The drop of the GDP in Q1 2013 by 2.4% has not changed following partial refinements, and thus the total GDP in the first half of 2013 was by 1.9% lower, y-o-y. If compared quarter-on-quarter (q-o-q) the GDP, on the contrary, increased by 0.6% in Q2 2013, following the decrease by 1.3% in Q1 2013.

The GDP development in recent quarters was influenced by a number of extraordinary effects, which, moreover, were not exerting influence for the same period of time:

- Falling investment activities had an essential impact on the GDP resource formation and use. Gross fixed capital formation in Q2 2013 dropped by almost 23% compared to that in Q1 2008, when it culminated. The lack of orders affected namely construction, which in Q2 2013 formed by 13% less value added than in Q2 2010.

- A drop or stagnation of economic activities in countries of our major trade partners in Q1 2013, as a result of economic recession, got reflected in a negative manner in foreign demand, development of which the Czech Republic economy is rather dependent on. Thus the external trade temporarily ceased to be a source of economic growth. In Q2 2013 foreign demand began to grow again, as a result of recovered boom, especially in Germany, and provided for faster growth of exports than that of imports with a positive impact on the GDP development.

- Unusually cold and long winter in the whole region of Central Europe had a negative influence on economic activities, which are at a great extent dependent on weather conditions. Under the Czech Republic conditions this adversely affected formation of gross value added (GVA) especially in construction, but not only in these activities.

- GDP formation was strongly affected, namely if compared quarter-on-quarter, by uneven contribution of the excise tax from tobacco products. The stocking up in advance at the end of the previous year pushed the GDP formation in the last quarter of the last year up but a drop followed especially at this year beginning. While GDP in Q1 2013 decreased by 1.3% compared to the Q4 2012, gross value added expressing the development of performance of respective activities decreased by mere 0.4%. In Q2 2013 the impact of the stocking up in advance affected the quarter-on-quarter comparison in the opposite way, yet the influence intensity was lower.

Development in Q2 2013

Demand components

The final consumption expenditure increased by 0.8% y-o-y namely due to a low basis of the last year. Compared to the previous quarter, on the contrary, the expenditure was by 0.5% lower. In households, where expenditure increased by 0.5% y-o-y, interest of consumers concentrated more than in the last year on durables, especially household furnishing and transport equipment. Conversely, households purchased non-durables at a lower rate than the last year.

Capital formation decreased by 12.6%, y-o-y, and its volume stayed roughly at the level of the Q1 2013. Fixed capital formation was by 6.2% lower y-o-y and by 1.5% lower q-o-q. All main types of investment expenditure contributed to the decrease.
Capital formation was influenced in adverse manner by development of inventories, which decreased during the Q2 2013 at current prices by CZK 6.4 billion (seasonally unadjusted), while in the corresponding quarter of 2012 inventories grew by CZK 9.6 billion.

An important change happened in the development of the external trade and in its contribution of the GDP formation. Following a temporary decrease in Q1 2013 exports grew by 2.0%, y-o-y, while imports increased by mere 0.5%. In Q2 2013 the active balance at current prices increased year-on-year by CZK 20.1 billion to reach CZK 66.2 billion.

Structure of the supply

The gross value added decreased by 1.2% y-o-y, of which by 1.3% in manufacturing, by 3.7% in construction, by 1.4% in wholesale and retail trade, and by 1.5% in real estate activities. A significantly positive result was achieved in financial and insurance activities in which the GDP grew by almost 20%. If compared quarter-on-quarter the GVA grew by 0.2%.

Employment

In the Czech Republic, viewed in the national accounts approach, in Q2 2013 there were, on average, 5 141 thousand persons employed, which was by 1.3% more than in the previous year and by 0.5% more than in Q1 2013.
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^*/ Unless otherwise stated, all data presented in this news release are adjusted for price, seasonal, and calendar effects.


Contact person: Jan Heller, Director of the Quarterly National Accounts D epartment, phone number (+420) 274 052 865, e-mail: jan.heller@czso.cz
Used data sources updated as at: 29 August 2013
Related CZSO web page: /csu/czso/hdp_ts
Next Release will be published on: 27 September 2013 (national accounts for the second quarter of 2013)

Published: 03.09.2013
The data are valid as of the release date of the publication.