The Czech economy expanded faster than expected in the first quarter, with household consumption a main growth driver before high inflation and interest rate hikes expected this year trigger a slowdown.
The Czech economy posted 0.9% quarter-on-quarter growth in the first three months of 2022, higher than a flash estimate of 0.7%. In year-on-year terms, growth reached 4.8%, above the preliminary estimate of 4.6% reported last month.
Central Europe's economies have started 2022 in high gear, propelled largely by home-grown demand after COVID-induced lockdowns ended, while companies are still working through global supply disruptions and soaring energy and material costs.
But a slowdown is coming, with firms continuing to face constraints and consumers becoming more pessimistic amid price growth at its highest in decades, fast-rising borrowing costs and utility bills, and new uncertainties due to war in Ukraine.
In the data breakdown released on Tuesday, Czech household consumption was a strong year-on-year gainer but eased a touch in quarter-on-quarter terms.
Signs are already pointing to the slowdown ahead, with Czech consumer confidence hitting a 10-year low. Elsewhere, Hungarian consumer confidence has also eased.
(Reporting by Jason Hovet in Prague; Editing by Kenneth Maxwell)