Prague - The domestic economy is still struggling, according to new data from the Czech Statistical Office on the third quarter's gross domestic product.
"According to a more accurate estimate, gross domestic product adjusted for price, seasonal and calendar influences dropped 1.3 percent in the third quarter year-on-year and 0.3 percent from the previous quarter," said the Czech Statistical Office.
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In the first three quarters of 2012, Czech GDP decreased by 0.9 percent compared to the same period of 2011.
Household spending dropped 2.4 percent compared to 2011.
Even though the trade balance is still in surplus, exports cannot offset the drop in domestic consumption, said Citfin analyst Tomas Volf. "Households still count every penny, the state limits investment on a large scale, and foreign demand is not in a condition to allow Czech exports to reverse the domestic recession," said Volf.
The outlook for the fourth quarter is not optimistic either, especially given the fact that the German economy, a key market for Czech exports, keeps struggling.
According to the Czech Statistical Office, the sectors of construction, agriculture and industry are the worst-hit by the crisis.
The construction sector has suffered from a lack of bigger orders for a long time. Employment in this sector has dropped 6 percent over the last three years.
This year's crop was smaller than in 2011, which translated into higher prices of agricultural products.
The current slowdown in the industry, previously a key contributor to Czech economic growth, is led by weaker activity in the manufacturing, energy and mining sectors, said the office.
