GDP grew by 2.2% in Q3/00, i.e. at the same rate as in Q2/00 when it grew by 2.1% (after the CSO revised data last week). Domestic consumption grew by modest 1% and net exports fell dramatically. However, fixed capital investment shot up by 18%, delivering a higher growth than was expected. Dramatic increase in inventories (+CZK 36 bil., i.e. 10% of Q3/00 GDP) was most unexpected, as inventories traditionally grow at a slower pace.
The overall number is better than we expected, but the structure of GDP growth is wobbly: net exports worsen and domestic consumption is lethargic. The investment growth remains the brightest spot, but erratic development of inventories provides a warning that the next quarter might look very differently.
Month-on-month industrial producer prices rose only by 0.1% and prices of construction work grew by 0.3%. November prices of industrial producers were higher by 5.9%, of construction work by 4.5%, of agricultural producers by 13.8% and of market services by 4.8%; all year-on-year.
The Czech koruna was almost unaffected against the euro after GDP and PPI figures release. At the end of the day the koruna stood at 34.71 to the euro. The Czech koruna/dollar exchange rate followed a weakening of the euro against the dollar caused by the approaching end of the presidential election battle in the United States. The koruna thus weakened to 39.70 to the dollar.