The Czech economy continued its moderate growth trajectory in the second quarter of 2024. Gross domestic product (GDP) rose by 0.6% compared to the previous year and by 0.3% compared to the previous quarter. This positive development was primarily driven by private consumption and rising real household incomes, accompanied by moderate inflation and a real increase in wages.
According to Karolína Zábojníková, an analyst at the Czech Statistical Office, private consumption significantly contributed to GDP growth, although the rate of consumption growth weakened slightly. The increase in sales in the retail and service sectors supported this development. At the same time, the industrial sector, including key export industries, was less dynamic. “The change in inventories had a negative impact on GDP,” said Zábojníková.
Gross value added (GVA) recorded a slight increase of 0.5% compared to the previous quarter and 0.1% compared to the same quarter of the previous year. Services, which benefited from the recovery in domestic consumption, had a particularly positive impact. Conversely, industry suffered a decline in GVA of 0.6% compared to the previous quarter and 2.5% compared to the same period last year. The construction sector, which has been weakening for years, once again failed to show a turnaround.
Consumer price inflation rose to 2.5% in the second quarter, driven by higher transport prices and a smaller reduction in food and non-alcoholic beverage prices. Compared to the previous quarter, prices increased by 0.8%. Additionally, asking prices for property rose again.
Wages also developed positively: average gross monthly wages increased by 6.5% year-on-year to CZK 45,854, corresponding to a real increase of 3.9%. General employment increased by 0.5% compared to the previous quarter, while unemployment remained stable at below 3%.
Despite these positive trends in some areas, industry continues to suffer from weak growth, particularly in manufacturing and construction.
