Page 15 - CE Outlook Regions 2023

2.1.1 GDP growth

In its autumn forecast, the European Commission projected Czechia to
be on the brink of recession in 2023, with just 0.1% annual growth. EC
cited the high negative impact of energy prices on Czechia’s
industry-based economy, which is also exposed to supply chain
disruptions. The Czech Banking Association projects GDP growth of
0.2%.

The latest figures emerging in December suggest that Czechia may be
entering the new year in recession already. GDP decreased by 0.2%
q/q in the third quarter – though in y/y comparison it increased by 1.7%
– and analysts expect a further decrease in the fourth quarter following
weakening domestic demand.

The chief economist of the Czech Banking Association Jakub Seidler
commented on the latest 3Q 2022 GDP figures that “the published
structure of the growth is a rather negative surprise and shows a
hard-felt drop in household consumption exceeding the last CNB
prognosis”.

In its budgetary report from October the cabinet projected growth of
1.1% and average inflation of 8.8%. The International Monetary Fund
predicted in its autumn World Economic Outlook a slowdown to 1.5%
for the 2023 growth and 8.6% for average inflation.

By November the predictions further worsened with the finance ministry
prognosis from November projecting the economy will drop by 0.2%.

15 CE Outlook 2023 www.intellinews.com