Page 19 - CE Outlook Regions 2024

2.1.1 GDP growth
Czech GDP has teetered on the verge of recession, dropping by 0.8% y/y/ in Q3. Czechia is the only EU economy that has still not recovered to its pre-pandemic level and the IMF does not expect the Czech economy to achieve the pre-pandemic trend until 2028.
The Czech National Bank (CNB) has worsened its outlook, expecting a GDP drop by 0.4% for 2023 and growth of only 1.2% for 2024. Raiffeisenbank expects a 0.5% drop for 2023 as the economy does not show signs of major recovery soon, while household consumption is under continued pressures.
The EC also lowered its autumn economic outlook for the country (to -0.4% for 2023 and 1.4% for 2024) as it expects high energy prices and the government’s public finance consolidation package to bite into GDP growth next year. The Ministry of Finance stated in November that the austerity package will slow down the economy in 2024-2026 by 0.3 pp each year. High inflation has been strangling households and led to a dramatic drop in real wage growth. The Ministry also expects 1.9% GDP growth in 2024.
2.1.2 External environment
The country’s international trade benefited from higher y/y exports of motor vehicles in combination with the lower y/y volume of energy imports. From January to October 2023, the trade surplus reached CZK88.9bn (€3.6bn), while in the same period in 2022 it was in a deficit of CZK176bn. Exports increased by 1.4% y/y, while imports dropped by 5.6%. Exports of motor vehicles grew by CZK25.5bn (€1bn) y/y in October alone.
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