The document is an economic report on the Czech Republic from the third quarter of 2013. It analyzes key indicators of the Czech economy such as GDP, industrial output, construction, retail sales, unemployment, trade, inflation, interest rates, and currency exchange rates. The report finds that while the Czech economy recovered in 2013 after declining previously, growth remained modest and inflation was still elevated compared to the central bank's target. Unemployment levels differed across regions of the country.

1. 23.9.2013
Czech Economy
in 2013 Q3

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. 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. 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. Investment Research l Czech Republic l 5
Czech catching-up …

6. Investment Research l Czech Republic l 6
… in the European perspective

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. 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. 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. 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. Long-term unemployment rate (2012)
Investment Research l Czech Republic l 11

12. Youth unemployment (age 15-24, 2012)
Investment Research l Czech Republic l 12

13. Regional unemployment (July 2013)
Investment Research l Czech Republic l 13

14. Investment Research l Czech Republic l 14
Growing openness of the economy

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. 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. Investment Research l Czech Republic l 17
Key Czech trading partners (2012)
EXPORT
IMPORT

18. External balance – current account
Investment Research l Czech Republic l 18

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. 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. 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. Investment Research l Czech Republic l 22
Convergence process 1995-2012
Prices

23. Investment Research l Czech Republic l 23
General government debt

24. Investment Research l Czech Republic l 24
Long-term sovereign bond yields

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. 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. Investment Research l Czech Republic l 27
Key macroeconomic indicators

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.