Prague - The Czech economy is still in recession as GDP contracted for the third quarter in a row.
In the second quarter, Czech GDP shrunk by one percent from the same period of last year, said the Czech Statistical Office. However, this was better than the 1.2 percent decrease estimated by the agency in the middle of August.
From the first quarter, the economy contracted by 0.2 percent.
The second quarter decrease was driven by weak domestic demand, which dropped by 3.3 percent from 2011 and 1.1 percent from the previous quarter. Government spending dropped by 0.9 percent year-on-year and 1.1 quarter-to-quarter.
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"On the other hand, investments positively surprised by growing 8.4 percent (quarter-to-quarter)," said Raiffeisenbank analyst Vaclav Fanc.
In the first quarter, Czech GDP had decreased by 0.5 percent from 2011.
"I do not consider it a bad outcome, especially if we take into account that the decrease is probably caused by a drop in the first quarter, which was influenced by one-time factors. That's why I wouldn't speak of a crisis of the Czech economy, but rather about the conditions getting tougher, which is going to have aa more long-term character," said Jiri Moser from PriceWaterhouseCoopers Czech Republic.
Earlier this week, Eurostat said that the GDP of both the EU27 and the euro area had dropped 0.2 percent from the first to the second quarter on weak consumer spending and corporate investment.
In the first quarter, both zones reported zero economic growth.
