Czech GDP grew by strong 4.4% in first quarter of 2000, way above the market expectations. The growth comes after appalling Q1 of 1999, when GDP fell by 3.3%. The growth was driven by a good foreign trade performance: exports grew by 29.5%, while imports by "mere" 21.3% in constant prices. Here comes the biggest string attached, though; the Statistical office discounted nominal export growth (31%) by 2.5 percentage points, while it discounted nominal imports (+29.5%) by full 8.2 percentage points. This difference is supposed to reflect a change in terms-of-trade (i.e. more expensive oil) in Q1/2000 but seems pretty aggressive. Our estimates had indicated growth rates 30% for exports and 25% for imports. That would lessen the growth from 4.4% to 2%, exactly in line with expectations.
Other GDP items were in line with prediction. Investment grew by 1%, after 11 consecutive falls, as we had forecasted. Private consumption grew by modest 1.1% (prediction was more bullish 1.8%) and government consumption jumped by 1.9% (forecast 1%).
Overall, GDP numbers may be considered better than expectations, even bearing in mind the ambiguous discounting of trade figures. Foreign trade, driven by a boom in the European Union, is vibrant and domestic demand remains under control. After a long period, investments have found the floor and picked up, again. Thus, the trend is decidedly upwards. Year 2000 should be better than last two.