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.