Czech Economy: looking back and forward to 2014

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Czech Economy: looking back and forward to 2014

  1. 1. 23.9.2013 Czech Economy in 2013 Q3
  2. 2. Investment Research l Czech Republic l 2 GDP: There and back again … -7 -6 -5 -4 -3 -2 -1 0 1 2 3 4 5 6 7 8 9 %, y/y
  3. 3. Investment Research l Czech Republic l 3 … into recovery ? -4,0 -3,5 -3,0 -2,5 -2,0 -1,5 -1,0 -0,5 0,0 0,5 1,0 1,5 2,0 2,5 3,0 %, q/q, s.a.
  4. 4. Investment Research l Czech Republic l 4 … before re-conquering the peak 575 600 625 650 675 700 725 750 775 800 825 850 875 900 925 950 CZKbn, f.p. 2005, SA
  5. 5. Investment Research l Czech Republic l 5 Czech catching-up …
  6. 6. Investment Research l Czech Republic l 6 … in the European perspective
  7. 7. Investment Research l Czech Republic l 7 Industrial output and confidence -35 -30 -25 -20 -15 -10 -5 0 5 10 15 20 output, 3M MA, y/y, %, confidence, 3M MA
  8. 8. Investment Research l Czech Republic l 8 Construction seized by pessimism -65 -55 -45 -35 -25 -15 -5 5 -30 -20 -10 0 10 20 30 output, 3M MA, y/y, % confidence, 3M MA
  9. 9. Investment Research l Czech Republic l 9 Retail sales: real wages, taxes, jobs -5 0 5 10 15 20 25 30 35 -10 -5 0 5 10 15 sales, 3M MA, y/y, % confidence, 3M MA
  10. 10. Investment Research l Czech Republic l 10 Unemployment: amidst the desert 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 RU/JV, 3M MA HUR, 3M MA Euroarea, HMN, 3M MA %, persons
  11. 11. Long-term unemployment rate (2012) Investment Research l Czech Republic l 11
  12. 12. Youth unemployment (age 15-24, 2012) Investment Research l Czech Republic l 12
  13. 13. Regional unemployment (July 2013) Investment Research l Czech Republic l 13
  14. 14. Investment Research l Czech Republic l 14 Growing openness of the economy
  15. 15. Record trade surpluses Investment Research l Czech Republic l 15 -175 -150 -125 -100 -75 -50 -25 0 25 50 75 100 125 150 175 200 225 250 275 300 325 350 375 0 50 100 150 200 250 300 Export, 12M MA Import, 12M MA TRADE BALANCE, 12M CZK bn CZK bn TRADE BALANCE, 12M
  16. 16. Investment Research l Czech Republic l 16 Both export and import dropping y/y (?) -30 -20 -10 0 10 20 30 40 Export Import y/y growth, %, c.p.
  17. 17. Investment Research l Czech Republic l 17 Key Czech trading partners (2012) EXPORT IMPORT
  18. 18. External balance – current account Investment Research l Czech Republic l 18
  19. 19. Investment Research l Czech Republic l 19 Consumer inflation: below target … -2 -1 0 1 2 3 4 5 6 7 8 %, y/y CNB inflation target Headline inflation Predictions: Headline inflation - Financial markets´ inflation expectations Monetary policy inflation
  20. 20. Investment Research l Czech Republic l 20 … but still elevated fuel prices 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 Gas Diesel CZK/l
  21. 21. Investment Research l Czech Republic l 21 European perspective 77 0 10 20 30 40 50 60 70 80 90 100 110 120 130 140 150 160 170 Price level index (2012), EU27=100
  22. 22. Investment Research l Czech Republic l 22 Convergence process 1995-2012 Prices
  23. 23. Investment Research l Czech Republic l 23 General government debt
  24. 24. Investment Research l Czech Republic l 24 Long-term sovereign bond yields
  25. 25. Investment Research l Czech Republic l 25 Crown used to be strengthening … 10 15 20 25 30 35 40 45 CZK/EUR CZK/USD monthly average, CZK/LCY
  26. 26. Investment Research l Czech Republic l 26 … also in real terms -12 -8 -4 0 4 8 12 16 20 24 28 32 36 40 44 48 52 56 Index growth against Jan 1996 Index growth, y/y Trendline Index, % Real appreciation of koruna
  27. 27. Investment Research l Czech Republic l 27 Key macroeconomic indicators
  28. 28. 23.9.2013 Thank you for your attention. Martin Kupka Investment Research mkupka@csob.cz www.csob.cz This non-exhaustive information is based on short-term forecasts for expected developments on the financial markets. CSOB cannot guarantee that these forecasts will materialize and cannot be held liable in any way for direct or consequential loss arising from any use of this document or its content. The document is not intended as personalized investment advice and does not constitute a recommendation to buy, sell or hold investments described herein. Although information has been obtained from and is based upon sources CSOB believes to be reliable, CSOB does not guarantee the accuracy of this information, which may be incomplete or condensed. All opinions and estimates constitute a CSOB judgment as of the data of the report and are subject to change without notice.

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