Czech gross domestic product grew 3.2 percent in the third quarter from a year earlier, slowing from a revised 3.8 percent in the second quarter and 4 percent in the first quarter. GDP growth resulted mainly from an increase of household consumption (3.4%, y-o-y) and fixed capital creation (7.4%, y-o-y). On the other hand, net exports influenced GDP value negatively as real imports grew faster than real exports reflecting worsening condition on EU markets for Czech exports.
Industrial production increased by 4.1%, y-o-y, in October. The value adjusted for the number of working days showed an increase by 2.1%. Reasons for declining pace of growth can be found in two areas. The first one is a decreasing production of consumer non-durable goods (-1.6%, y-o-y). The second reason is stagnation in production of transport equipment that is a vital branch of the Czech economy.
Federal Reserve policy makers lowered the benchmark U.S. interest rate a quarter percentage point, the 11th reduction this year, and signaled more cuts are possible to pull the economy out of recession. Economic activity remains soft with underlying inflation likely to edge lower from relatively modest levels, alleged FED in a statement accompanying its decision.
The Czech currency soars again. The CZK/EUR exchange rate reached a new all-time high at 32.78. The Czech currency gained against the euro almost 2% in last 14 days.
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