The Czech Republic's economic output contracted for the second straight quarter in the three months ended December, largely due to lower household consumption, thus entering a technical recession, preliminary estimates from the statistical office showed on Tuesday.
Gross domestic product decreased 0.3 percent sequentially in the fourth quarter, following a 0.2 percent fall in the third quarter. Economists had forecast a 0.6 percent fall.?
By contracting further in the last quarter of 2022, the economy has now entered into a technical recession, which is described as two quarters of output decline in a row.
On a yearly basis, the economic growth eased notably to 0.4 percent in the December quarter from 1.5 percent in the September quarter.
The overall annual increase was mainly supported by gross capital formation and external demand. On the other hand, final consumption expenditure had a negative influence, the agency said.
During the year 2022, overall growth in GDP was 2.5 percent, underpinned by expenditure on gross capital formation and by external demand. Nonetheless, the contribution of household final consumption was negative during the final quarter.
Data also showed that employment decreased 0.3 percent quarterly, while it rose 1.5 percent on an annual basis in the fourth quarter.
"The outlook for the economy has brightened a bit in recent months as natural gas prices have fallen sharply and business and consumer sentiment has improved, but we still think GDP is likely to be weaker than most other analysts expect over 2023 as a whole," Capital Economics economist Nicholas Farr said.