GDP growth slightly accelerated compared to the last quarter of 2001.This was enabled by improving domestic demand, that did not decline for the first time since 2000.
However, as domestic demand stagnated, the growth had to
be again driven by foreign demand, although the contribution of net export to the GDP growth was smaller than previously. Household consumption continued to accelerate
moderately,which may be partially the result of cheaper
consumer credit. However, the growth of 3.5% y/y still lags
behind what was usual when the economy was on the
growth track. Investment activity remains deep in recession.
No improvement from the poor results of the second
half of 2001 occurred, as investments were down 13.3%
y/y.
As regards the production side, the economy is driven by
services, that grew by 3.9% y/y, although their annual
change declined a notch. On the other hand, the industry
improved from minus 2.5% in Q4 2001 to minus 2.0%.
Construction activity plunged further to 12.9%, which corresponds to developments of investments.
Even in the future, we cannot expect any significant improvement of household consumption. Decelerating retail
sales in April and May even seem to indicate a slowdown.
Retail sales were up 1.8% y/y in May and 3.1% y/y in
April, compared to 4.3% in the January-May period.
We see the full year GDP growth at 1.3% y/y, for the second quarter we expect 0.7%.
Marek Fer, Jakub Dvorak
Investment Research, CSOB