The gross domestic product grew by 3.1% by in Q2, according to the preliminary report. The outcome is in line with market expectations, we predicted +3,3% y/y. As expected, the GDP accelerated from +2.9% y/y in Q, however, this may be fully attributed to the basis effect. The detailed structure will be released together with revised figures on October 2. So far, the stat. office only said that the value added in services rose while industry and agriculture decreased in y/y terms. The decline in industry is somehow disappointing given the data on industrial production. Investment rose by 5.1%, which is also weaker than wee expected, driven by investment in public sector and construction of houses.
As the figure is in line with expectations, it should not change the central bank’s views significantly. The central bank should pay more attention to the growth on household consumption. We expect a moderate deceleration of household consumption in Q2 due to the basis effect, thus the threat of monetary tightening will remain present on the market in coming months.
The current account deficit in July came out relatively wide at EUR 173 m, roughly in line with our forecast of EUR 150 m and worse that market consensus. The current account was in surplus last July. As we expected, foreign trade balance widened from June to EUR 303 m. Both exports and especially imports accelerated in year-on-year as well as in monthly terms, which may be a signal of improved demand from abroad. Nevertheless, we would rather recommend waiting for another monthly data before drawing such conclusions.
Among the other components, balance of tourism posted a surplus of EUR 242 m, however, it was again significantly worse compared to last July. Balance of incomes improved from last month, which was burdened by seasonal profit repatriations.
Jakub Dvorak, Investment Research, CSOB