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The Czech GDP has shrunk by 11%

According to the report of Czech Statistical Office GDP shrank by 11 % in the country in the second quarter of 2020 having been the highest drop in the economy of the country since 1993, i.e., the establishment of the Republic and this the biggest drop in the economy. A 10,7% GDP drop prognosticated in the provisional report published in late July has been confirmed with the current results.

The drop of GDP is mainly connected with COVID-19 leading to contraction of demand from other countries which has 8% share in the whole GDP falls. The contraction of export items decreased by 23.3% and imports sank by 18.2%.

The reason for fall-off in exports with every passing year was primarily reduction of oil and natural gas imports, basic metals, machinery and equipment, as well as supplies for automotive industry.

Fall in the household consumption of the Czech GDP is 2% of the general drop.

Households contracted expenses chiefly on durable and semi-durable goods, as well as on services.

However, the analysts are optimistic and consider the worst economic effects to be behind for the country. And the Czech officials stated not to realize wide business closures as at the beginning of the year in case of the second wave.

But negative impact of GDP fall is considered to lead to increase of unemployment in the country in autumn. Though, analysts are more upbeat and prognosticate a 7% general fall in GDP for 2020.

According to Jakub Seidler, ING chief economist the current data does not differ much from the preliminary one and fall of GDP is expected to be 7% this year, the result of which being completion of governmental support programmes.

Lukáš Kovanda, Trinity Bank’s chief economist is more optimistic concerning the performance indicators of economy and expects its gradual increase or moderate fall, but regarding the labour market he is not so optimistic and consider it to worsen in the coming quarters.

We wish COVID-19 causing negative impact on all spheres in the world, including economy to disappear very soon. But Wayne Gerard Trotman’s thoughts (British award-winning writer, filmmaker, artist, photographer, composer and producer of electronic music) are more realistic: “A pandemic will lead to permanent social, economic and cultural changes. The key is to create good from a bad situation.”

So, let’s try to create good from COVID-19 even if it is awfully difficult.

  • Author: Nargiz Mammadova

Public Relations Manager

13.01.2022
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