The Czech economy eased its decline in the third quarter of this year. Gross domestic product (GDP) fell by 5.8 percent year on year. In the second quarter, it decreased by 10.9 percent due to coronavirus, which was the worst result since the establishment of the independent Czech Republic. Quarter-on-quarter, GDP grew by 6.2 percent in Q3. This follows from a preliminary estimate published today by the Czech Statistical Office (CSO).
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“The year-on-year development of the economy was mostly affected by a significant decline in domestic demand, both investment and household consumption. The recovery in foreign demand for Czech goods failed to offset the decline in exports of services, “said Vladimír Kermiet, director of the CZSO’s national accounts department.
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Year-on-year, gross value added (GVA) decreased in all sectors of the national economy. Developments in industry and also in trade, transport, accommodation and hospitality had a negative effect on the reduction in GVA.
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The preliminary estimate published today does not yet specify the details of GDP development; a more detailed structure will be published by the CZSO in the coming weeks.
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Analysts expected the economy to recover in the third quarter. The published numbers even exceeded their estimates. However, analysts warned that due to the poor development of the coronavirus epidemic, the recovery will last only one quarter and in Q4 the year-on-year decline in GDP will be double-digit again.
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Due to coronavirus, the government has been taking measures to prevent the spread of the disease in March. It restricted free movement and travel, association, business, culture, sports, schooling and other activities. Some companies closed down because of this, while others lacked employees due to closed borders. From mid-May, restrictions began to be gradually relaxed, but this was only valid until September, when the number of infected people began to increase significantly again. Currently, many shops, including restaurants, are closed again, large supermarkets are not allowed after 20:00 and on Sundays, and schools are also closed.
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Statisticians said today that employment fell 1.7 percent in the third quarter from the same period last year, down 0.1 percent quarter on quarter.
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