Actual figure: 0.9% q/q and 2.4% y/y
Previous flash estimate: 0.8% q/q and 2.2% y/y
Final data mildly improved the picture of the Czech economy. GDP growth further accelerated following the Euro-zone and regional peers. However, the gap between output and potential capacities remains still widely open and leaves room to keep interest rates at current low level.
Quarterly GDP growth was mainly supported by net exports. The Czech economy profited from recovery in main trading partners. Both, Germany and Slovakia managed to speed up their growth significantly in 2Q. Thus, exports rose by 2.7% qoq, imports gained 2.0% qoq. Domestic demand also picked up and supported GDP. Household expenditures on consumption goods increased by 0.6% qoq, fixed capital investment rose by 1.3% qoq. The only negative contribution came from the government. Expenditure cuts resulted in lower government consumption spending.
Revision did not change the picture dramatically and we stick to our 2010 GDP forecast at 2.1%. Monetary policy should not be surprised and interest rates are likely to stay flat for next 3-4 quarters.