Prague - The Czech economy has contracted for the sixth quarter in a row. It is the longest recession in the history of the country.
According to preliminary data released by the Czech Statistical Office (CSU), Czech GDP in the first quarter of 2013 dropped 0.8 percent from the previous quarter, and decreased by 1.9 percent from the same period in 2012. Experts expected a less dramatic economic slowdown.
The decrease in the first quarter of 2013 was driven above all by a drop in foreign demand and uneven tax collection. In the previous quarters, the recession was caused more by weak household and government consumption.
After three years of growth, Czech exports decreased in the last quarter and foreign trade ceased to be a source of GDP growth, said the CSU.
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"Because of the recession in the eurozone, the demand for our exports is decreasing. Especially the field of car production is affected by this development," said Raiffeisenbank analyst Vaclav Franc.
"The Czech economic recession is not approaching its end, but is rather culminating. We cannot expect domestic demand to do nothing more than to ease the drop, so the future economic results will be determined above all by foreign markets. The Czech figures are not the only disappointment - after big hopes, Germany has grown only 0.1 percent. The Czech economy has nothing to rely on so far," said CSOB bank analyst Petr Dufek.
Patria Finance economist David Marek pointed out that the latest Czech GDP data is worse than in most other European countries. Currently there is no economic sector that would be able to contribute to GDP growth in the Czech Republic, said Marek.
The Hungarian economy grew 0.7 percent in the first quarter of 2013, ending its four-quarter recession. The Slovak economy has also avoided recession.
