According to our estimates, GDP in the 3Q06 increased by 6.0% in real terms after growth of 6.2% in the 2Q06. The key factor behind this economic growth should be household consumption supported by an increase in wages and the growing importance of consumer loans. Investments also contributed to the higher GDP, where the important role is being played by the high volume of reinvested profits coming from foreign investors. Maintaining roughly a 5% growth rate in the gross investment into fixed capital is indicated by data on construction output and imports of machinery and vehicles. Imports and exports in the 3Q06 show a negative contribution from net exports to GDP growth. A lower surplus in the services balance also contributed to this fact.
In the 4Q06, we expect to see a slight deceleration of the Czech economy; and; for the whole year of 2006, we are looking for an increase in GDP of 6.0%.