"Real GDP of the Czech Republic, adjusted for seasonal and calendar effects, more or less stagnated in the first half of this year, but according to the preliminary estimate of the Czech Statistical Office (CSU), it fell by 0.3 percent quarter on quarter in Q3 2023," the ministry's November forecast revealed. "Economic output has thus still not surpassed the pre-pandemic level."
The latest figure is worse than the ministry's previous forecast in August that the GDP would decrease by 0.2 percent this year. The ministry attributed the decline to weaker household consumption caused by high inflation.
"High inflation continues to slow economic growth this year and reduce living standards," it said. "Households continue to face the impact of high inflation this year and their real consumption is expected to fall further."
October's annual inflation in the Czech Republic reached 8.5 percent, rising 1.6 percentage points from September. The ministry anticipated an average inflation rate of 10.8 percent for the year.
For next year, the ministry predicts the economy to grow by 1.9 percent, driven by renewed growth in household consumption and export markets. However, the figure is still lower than the ministry's August forecast of 2.3 percent GDP growth.
Last week, the Czech National Bank also revised down its economic forecast, predicting the GDP to decrease by 0.4 percent in 2023 and grow by 1.2 percent in 2024.