PRAGUE, Aug. 19 (Xinhua) -- The Czech ministry of finance on Friday raised its forecast of gross domestic product (GDP) growth for this year to 2.2 percent year on year, up from its April forecast of 1.2 percent.
Citing figures from the Czech Statistical Office, the ministry said GDP grew by 0.2 percent quarter on quarter and by 3.6 percent year on year in the second quarter of 2022.
"While the economy had grown in the first half of this year despite adverse circumstances, it should experience a mild recession in the second half of the year. Nonetheless, GDP for the full year 2022 could increase by 2.2 percent," the ministry said in its latest forecast.
Growth should be driven by fixed capital investment and increased inventory accumulation, it said. Household final consumption expenditure will be dampened by a sharp rise in the cost of living, especially energy prices, and by tighter monetary policy.
The ministry said economic growth for 2023 "could slow further to 1.1 percent," lower than its previous forecast of 3.6 percent.
"Households will continue to face the impact of high inflation next year, so the dynamics of their consumption should remain very low. Gross fixed capital formation will continue to be pro-growth, but weaker year-on-year inventory accumulation will slow the economy noticeably," it said.
The ministry said annual inflation is expected to accelerate further in the second half of 2022 to reach around 20 percent, and the average rate of inflation should reach 16.2 percent this year.
"Not only the prices of food, fuel, electricity, natural gas and imputed rent, but also other categories of goods and services are contributing significantly to the exceptionally strong rise in consumer prices," it explained, adding that the average inflation rate could slow to 8.8 percent in 2023.
Last year, the Czech economy grew by 3.3 percent year on year, according to the Czech Statistical Office. ■
