GCC stock markets experience mixed performance in February 2025

The GCC stock markets saw a mixed performance in February 2025, with three of the seven regional exchanges posting gains despite the overall decline in the MSCI GCC index. The market downturn was largely influenced by a global economic slowdown, geopolitical tensions, and declining crude oil prices.

Market Performance Overview

The MSCI GCC index dropped by 0.4% in February, primarily due to losses in large-cap stocks. The best-performing markets were Bahrain (+4.3%), Kuwait (+4.1%), and Dubai (+2.6%), while Saudi Arabia (-2.4%), Oman (-2.4%), and Qatar (-2.1%) registered declines. Abu Dhabi posted a marginal 0.2% loss.

Despite February’s downturn, the year-to-date (YTD) performance of the GCC markets remained positive, with a 2.6% gain overall. Kuwait led the region with an impressive 10% increase since the start of 2025.

Sectoral Performance

The Real Estate sector outperformed other industries with a 2.5% gain, followed by Telecommunications (+2.0%) and Banks (+1.9%). In contrast, the Insurance, Healthcare, and Utilities sectors faced mid-single-digit declines, while the Materials and Energy sectors dropped by 5.1% and 1.7%, respectively.

Country-Specific Highlights

Kuwait: Market Continues Strong Growth

Kuwait’s Premier Market Index led the gains, rising 4.7% to 8,693.1 points. The All-Share Market Index broke the 8,000-point mark, closing at 8,101.2 points (+4.1%). Trading volume surged 47.1%, reaching its highest monthly level since June 2009.

Saudi Arabia: Index Faces Decline Amid Oil Price Volatility

Saudi Arabia’s TASI index fell 2.4% in February, closing at 12,111.9 points. This decline was attributed to weak earnings reports and falling crude oil prices. The Media sector was the worst performer, down 19%, while Telecommunications and Banking sectors gained 4.6% and 0.7%, respectively.

UAE: Mixed Results for Abu Dhabi and Dubai

Abu Dhabi’s ADX saw a slight 0.2% drop, but its Real Estate sector recorded a strong 15.5% gain.

Dubai’s DFM gained 2.6%, driven by strong performances in the Financial and Real Estate sectors. Emirates Islamic Bank was the top gainer with a 25.7% share price increase.

Qatar: Broad-Based Declines

The QE 20 index fell 2.1%, while the broader QE All Share Index managed a 0.1% increase. The Real Estate sector was the worst performer (-3.3%), while the Transportation sector was the best (+3.3%).

Bahrain: Strongest Market in February

Bahrain’s All Share Index jumped 4.3%, making it the top-performing market in the GCC. The Real Estate sector led with a 10.4% gain, driven by Seef Properties (+13%).

Oman: Continued Weakness

Oman’s MSX 30 index dropped 2.4%, extending its losses from January. The Financial and Services sectors posted declines, while the Industrial sector surged 7.8%. Oman’s first IPO of 2025, Asyad Shipping, is expected to raise OMR 128.1 million.

Outlook for GCC Markets

Despite February’s volatility, GCC markets remain in a strong position due to economic diversification efforts, stable corporate earnings, and positive investor sentiment. Kuwait’s robust growth, the UAE’s economic resilience, and strong performances in Bahrain and Dubai indicate that market confidence is holding firm. However, ongoing geopolitical uncertainties and fluctuating oil prices may continue to impact regional markets in the months ahead.

Source: GCC Markets Monthly Report, Kamco Invest Research

Czech economy grew by 1% in 2024, driven by household consumption

The Czech economy recorded a 1% increase in 2024, with household consumption emerging as the primary driver of growth. In the fourth quarter alone, gross domestic product (GDP) expanded by 1.8% year-on-year and 0.7% quarter-on-quarter, according to updated data from the Czech Statistical Office (ČSÚ). The growth figures were slightly more favorable than initial estimates released in January.

While domestic consumption provided a boost to the economy, weak foreign demand remained a limiting factor. Analysts and the Czech National Bank (CNB) agreed that economic activity was weighed down by challenges in export markets, particularly in Germany. However, analysts expect GDP growth to accelerate to around 2% in 2025 as domestic spending continues to recover.

Household final consumption expenditure rose by 2% for the full year, while general government spending increased by 3.8%. In contrast, gross fixed capital formation declined by 1.3%. The balance of foreign trade showed a notable improvement, rising by CZK 141.2 billion year-on-year to reach CZK 525.6 billion.

Economists attribute the recovery in household spending to improving real incomes, supported by solid wage growth and a stable labor market. According to Vít Hradil, chief economist at Cyrrus, consumer confidence is beginning to return after years of economic uncertainty triggered by the COVID-19 pandemic and inflationary pressures. However, he noted that caution persists among consumers, who continue to prioritize savings despite increased spending.

The CNB’s expectations for economic performance in the fourth quarter were surpassed, particularly in household consumption, which increased by 3.2% year-on-year—well above the central bank’s forecast of 1.9%. Jakub Matějů, Deputy Director of the CNB’s Monetary Section, stated that the positive trend reflects rising real incomes in a low-inflation environment. He added that household consumption remains below pre-pandemic levels by approximately 3%, suggesting further room for recovery.

Despite strong domestic demand, sluggish export performance and weak investment activity held back growth. Net exports declined by 1.2% year-on-year in the fourth quarter, in line with CNB forecasts. Investment activity also fell, with gross fixed capital formation down 2.4%, exceeding the central bank’s anticipated 0.2% decline.

Pavel Sobíšek, chief economist at UniCredit Bank, described the fourth quarter’s year-on-year growth as the strongest in nine quarters, suggesting that momentum from the second half of 2024 could help GDP surpass 2% growth in 2025. However, some analysts remain cautious. Petr Dufek, chief economist at Creditas Bank, pointed out that while GDP growth accelerated, it was not accompanied by an increase in overall value creation. “The added value generated during this period remained stagnant, which limits the broader economic impact of the growth,” Dufek noted.

Looking ahead, analysts expect household consumption to continue driving economic growth in 2025, but external risks remain a concern. Global trade tensions, particularly the potential for a trade war between the United States and the European Union, could significantly impact export-dependent sectors of the Czech economy. While domestic factors point toward continued recovery, uncertainty in foreign markets may shape the pace of growth in the coming year.

Source: ČSÚ, CNB, Cyrrus, UniCredit Bank, Creditas Bank and CTK

Rents in the Czech Republic decline slightly at end of 2024, Prague remains most expensive

At the end of 2024, rental prices in the Czech Republic saw a slight quarter-on-quarter decline, with the average rent falling by 0.3% to CZK 309 per square meter per month. While the overall drop was minimal, regional variations were evident. Rents in Karlovy Vary and Brno decreased by less than one percent, while in most regions, prices either stagnated or experienced a modest increase. The Central Bohemian Region and Zlín saw the most notable growth, with rental prices rising by approximately five percent compared to the third quarter. These findings are based on data from Deloitte’s Rent Index.

Despite the overall slight decrease, Prague remained the most expensive region in the country, with average rents rising by 0.7% in the fourth quarter to CZK 425 per square meter. The highest rental costs were recorded in Prague 1 and Prague 2, where prices reached approximately CZK 468 per square meter. Prague 3 followed closely at CZK 466 per square meter, while other central districts such as Prague 7, 8, and 5 saw rental costs ranging from CZK 430 to CZK 442 per square meter.

Some of the sharpest increases were seen in Prague 3, where rents surged by 5.4% quarter-on-quarter, and Prague 4, which experienced a 4.4% rise. On the other hand, Prague 9 and Prague 6 saw rental prices drop by around 2.5%. In Prague 2, where rents had previously spiked by 5.5% in the third quarter, prices declined by nearly 2% in the final quarter of the year. This adjustment, coupled with rising rental costs in Prague 1, caused rental prices in these two districts to even out.

Outside of Prague, the Ústí Region continued to have the cheapest rental housing, with average rents increasing slightly by 0.5% to CZK 204 per square meter. According to the index, rents in Prague remain 208% more expensive than in Ústí. Rental prices stagnated in Liberec and Jihlava, where rates ranged from CZK 251 to CZK 263 per square meter. However, growth was observed in multiple regions. Apart from the Central Bohemian Region and Zlín, where prices exceeded CZK 290 per square meter, rents in Hradec Králové rose by 3.9% quarter-on-quarter, bringing the region closer in price to the aforementioned areas.

The year-end rental market was also shaped by renewed interest in homeownership. Increased interest rates and an improving economic outlook prompted more people to consider purchasing property, leading to a shift in demand away from rentals. Additionally, the growing supply of newly completed apartments designated for rental housing contributed to price stabilization. Seasonal trends also played a role, as rental demand typically declines during certain periods of the year.

“In addition to redirecting people’s focus towards home purchases, the stagnation of rental prices was likely influenced by the increasing supply of newly completed apartments intended for rental housing. Seasonal factors also contributed, as demand for rentals tends to decrease at specific times of the year,” explained Petr Hána, director of Deloitte’s Real Estate and Construction Department.

Source: Deloitte and CTK

Major overhaul planned for Prague airport as preparatory work begins

Prague’s Václav Havel Airport is set to undergo a significant transformation in the coming years as part of a modernization project aimed at increasing capacity and efficiency. The plan includes the demolition and reconstruction of several parking structures, the rebuilding of the elevated roadway leading to Terminal 2, and the expansion of both airport terminals. A key component of the project is the introduction of a railway connection and the construction of a train station to improve accessibility.

The modernization effort, which carries a preliminary budget of CZK 32 billion, is expected to be completed by 2033. Along with road modifications and reconstructions, preparatory work has begun on a new cable duct and a transformer station to enhance the airport’s electricity supply. Denisa Hejtmánková, spokesperson for the airport police, confirmed these developments to the Czech News Agency.

Starting Monday, March 3, and running until the end of June, access to the Aviatická street and the PB parking lot will be restricted due to road repairs in front of Terminal 1. Another key project planned for this year is the construction of a supply corridor beneath Terminal 1 to improve the efficiency of deliveries to shops and restaurants. The corridor is expected to cost approximately CZK 90 million.

Last August, work began on extending the bridge in Aviatická Street, which runs over K Street near the airport. That project is slated for completion in May. In November, construction commenced on the cable duct and transformer station, a project valued at over CZK 1 billion, with completion scheduled for December 2026.

The airport plans to unveil a visualization of Terminal 2’s expansion and modernization in May, with the final architectural study now being completed. Terminal 1 is also set for an expansion. Following the completion of these upgrades, flight operations will be reorganized. Flights to Schengen area countries will be handled from Terminal 1, while Terminal 2 will serve non-Schengen destinations and low-cost airlines. Currently, non-Schengen flights are managed from Terminal 1.

Looking ahead, the airport also has plans for the construction of a parallel runway after 2030. Although no major updates have been made on this front, Hejtmánková confirmed that the Central Bohemian Region’s Building Authority initiated a zoning procedure last year, a necessary step before applying for building permits. A final land-use decision is expected this year.

The parallel runway is expected to increase airport capacity during peak times while allowing for stricter nighttime closures. The main runway will be closed between midnight and 5:30 a.m., while the parallel runway will be out of operation from 10:00 p.m. to 6:00 a.m. Once the parallel runway is completed, an existing perpendicular side runway—currently directing flights over densely populated areas of Prague and Kladno—will be decommissioned, reducing noise pollution for hundreds of thousands of residents.

The modernization will be financed entirely through the airport’s own resources or external commercial funding, without any contributions from the state budget. According to Hejtmánková, the upgrades are expected to increase the country’s gross domestic product (GDP) by 3.2 percent and create nearly 4,000 full-time jobs. The improvements are also aimed at boosting tourism and business opportunities.

Each year, the state-owned airport contributes at least 20 percent of its net profit as dividends, with the precise amount determined after the closure of audited financial statements. The current dividend policy, agreed upon with the Ministry of Finance, remains in effect until 2028. After that, the company will adjust its financial strategy to account for investments in airport modernization.

Václav Havel Airport handled 16.35 million passengers last year, marking an 18 percent year-on-year increase. In 2024, it aims to process 18.4 million passengers, surpassing the pre-pandemic record of 17.8 million travelers in 2019.

Source: CTK

Number of foreigners in Czech Republic continues to rise, now one in ten residents

At the end of 2024, the number of foreigners living in the Czech Republic reached 1,094,090, meaning one in ten people in the country is now a foreign national. The latest figures, published in a quarterly migration report by the Ministry of the Interior, indicate a steady increase in the foreign population, which grew by 28,350 people—or 2.7 percent—compared to the previous year.

The majority of foreigners in the country continue to be Ukrainian citizens, numbering 589,456. They are followed by 121,472 Slovak nationals and 69,015 Vietnamese citizens. The highest concentration of foreign residents is traditionally found in Prague, which accounts for almost a third of all legally residing foreigners. The Central Bohemian Region follows with a share of 14.2 percent.

By the end of 2024, 332,994 foreigners held temporary residence status in the Czech Republic, while 372,217 were registered as permanent residents. The total number of foreigners in the country surpassed one million for the first time in 2022, largely due to an influx of people seeking temporary protection after fleeing the Russian invasion of Ukraine. As of December 31, 2024, the number of temporary protection holders stood at 388,879—around 14,000 more than at the end of 2023.

Since the beginning of the conflict in Ukraine, the Czech Republic has issued temporary protection to a total of 659,970 people. Relative to its population, the country has hosted the most Ukrainian refugees of any EU member state. By December 2024, there were 36 Ukrainian refugees for every 1,000 inhabitants in the Czech Republic.

Meanwhile, the number of illegal migrants transiting through the country has dropped dramatically. Authorities detained 420 people attempting unauthorized transit in 2024, representing a 90 percent decrease from the previous year. The majority of those detained were from Syria, making up two-thirds of all cases, while others originated from Turkey, Russia, Afghanistan, Ethiopia, and Mongolia. Most entered the country by air—219 people in total—primarily on flights from Greece, often using irregular documents. Others arrived from Slovakia and Austria, with Germany, the Netherlands, and France being the most common destinations for onward travel.

Last year, Czech authorities processed a total of 1,363 asylum applications. The largest group of applicants were Uzbek nationals (224), followed by Ukrainians (205), Vietnamese (186), Turks (99), and Russians (91).

The government also facilitated the return of hundreds of individuals to their home countries. In 2024, a total of 748 people left through the Ministry of the Interior’s assisted voluntary return program, while the refugee facility administration aided in the return of 38 individuals. Additionally, 201 people were forcibly removed by Czech authorities, with Slovakia, Romania, and Ukraine being the primary destinations for these deportations.

The latest data highlights the Czech Republic’s role as a key host country for refugees and foreign workers, while also demonstrating shifting migration patterns and an evolving demographic landscape.

Source: CTK

Solida Capital Europe enters Romanian real estate market with acquisition of Victoria Center

On February 28, 2025, investment company Solida Capital Europe announced its entry into the Romanian real estate market with the acquisition of the Victoria Center office building from Manova Partners, formerly Macquarie Group. Colliers acted as the buyer’s advisor in the transaction.

Victoria Center is located on Calea Victoriei in the heart of Bucharest’s business district. The property offers approximately 8,600 square meters of premium office space and holds a BREEAM In-Use certification with an Excellent rating, reflecting its modern and sustainable design. It is home to leading tenants from the legal, IT, and financial services sectors, including Aon Romania, nShift, Botezatu Estrade & Asociații, and Eversheds Lina & Guia. Additionally, the Embassy of the United Mexican States in Romania recently selected the building as its headquarters. The Central Business District continues to be the most sought-after location in Bucharest, experiencing a nearly 20% rise in rental rates over the past two years, the highest increase in the city.

Joao Saracho, Managing Director of Solida Capital Europe, emphasized the strategic importance of this acquisition, describing it as part of the company’s broader plan to expand its real estate portfolio in Central and Eastern Europe. He noted that the investment aligns with Solida’s mission to capitalize on growth opportunities in dynamic markets and create value through asset management expertise. This transaction, the company’s first in Bucharest, signals further expansion opportunities in the region.

Colliers played a key role in facilitating the transaction, providing advisory services from the initial stages through to completion. Robert Miklo, Head of Capital Markets at Colliers, highlighted Solida Capital’s well-planned entry into the Romanian market and expressed confidence in the investment’s potential. He also emphasized Colliers’ anticipation of Solida’s continued expansion in the country. Stefania Baldovinescu, Senior Partner for Asset Services at Colliers, welcomed Solida Capital to the market and announced that Colliers would be providing property management services for Victoria Center.

The Romanian real estate investment market concluded 2024 with a total transaction volume of EUR 750 million, recording the highest transactional activity growth among the six largest economies in Central and Eastern Europe, including Bulgaria, the Czech Republic, Hungary, Poland, and Slovakia. Colliers consultants predict a strong performance for 2025, supported by an active transaction pipeline. Ongoing negotiations, valued at approximately EUR 500 million, suggest that investment volumes this year may surpass those of 2024.

Dino Polska reports strong growth and expansion in 2024

Dino Polska concluded 2024 with remarkable growth, reporting a total revenue of PLN 29.3 billion, reflecting a 14.1% increase compared to the previous year. The company continued its rapid expansion, closing the year with 2,688 stores across Poland, demonstrating its strong market presence. To support its ongoing development, Dino allocated PLN 1.6 billion in capital expenditures while creating 8,000 new jobs, bringing the total workforce to 49,900 employees.

The fourth quarter of 2024 saw the opening of 116 new stores, contributing to a total of 283 new outlets throughout the year. With its distinctive red logo, Dino stores have become a trusted part of the Polish retail landscape, offering consumers a uniform shopping experience and easy access to essential groceries and daily necessities. By the end of the year, the total selling area of Dino stores expanded to 1,061.2 thousand square meters, marking a 12% growth from the previous year.

Capital investments in Dino’s development over the past five years reached PLN 6.6 billion, underlining the company’s commitment to long-term expansion. Fresh products remained a major revenue driver, accounting for nearly 40% of total sales. The category includes fruit, vegetables, bread, and fresh meat supplied by the Agro-Rydzyna meat processing plant. Dino’s well-structured logistics ensure that fresh products are delivered to stores every morning. The like-for-like (LfL) sales growth in stores operating for more than a year reached 5.3% in 2024.

In line with its sustainability efforts, Dino Polska continued to prioritize renewable energy, equipping newly opened stores with photovoltaic (PV) installations. By the end of 2024, 2,476 stores, representing 92% of the entire network, were outfitted with PV installations. The total renewable energy capacity within the Dino Group reached 98.9 MW, with 86.6 GWh of solar power sourced in 2024, marking a 30.5% increase from the previous year.

Dino Polska’s continued focus on expansion, efficiency, and sustainability reinforces its position as one of Poland’s leading retail chains, catering to growing consumer demand while advancing its environmental initiatives.

Polish microenterprise loan market in 2024: Challenges and Outlook for 2025

The microenterprise loan market in Poland faced significant challenges in 2024, with businesses grappling with high interest rates, rising energy costs, and increasing wage levels. By the end of December 2024, the value of the loan portfolio for microenterprises stood at PLN 74 billion, accounting for 14% of the total loan portfolio of enterprises and local governments. Despite a 6.2% increase in investment loans, the overall loan growth for microenterprises declined by 3.8%.

According to the Central Registration and Information on Business (CEIDG), approximately 2.5 million microenterprises were registered in Poland at the end of 2024. These small businesses, primarily operating in construction, services, trade, and production, faced an economic environment marked by inflation and shifts in consumer behavior. With individuals prioritizing savings over spending, lending to small businesses saw a decline. Moreover, Poland’s micro-companies continue to exhibit a low level of indebtedness, with only 17% of active businesses utilizing bank credit.

Microenterprise Loan Market Performance

At the close of 2024, microenterprise loan values reached PLN 74 billion, reflecting a 2.1% year-on-year increase. The debt structure was dominated by working capital loans (33.9%) and overdrafts (25.5%), indicating that nearly 70% of microenterprise debt was used for short-term financing. Investment loans, aimed at business development, accounted for only 23.8% of total debt. Service companies (41.0%) and commercial enterprises (29.4%) led in terms of loan allocation, making up more than 70% of microenterprise debt, followed by manufacturing (14.9%) and construction (13.0%).

Despite a rise in investment loan value, microenterprise lending declined by nearly 4% in 2024. Businesses secured loans worth PLN 22.0 billion, marking a 3.8% contraction. Investment loans grew by 6.2% in value, but the number of loans issued fell by 29.2%. Meanwhile, working capital loans and overdraft facilities saw declines of 9.9% and 8.9%, respectively, compared to 2023.

Sectoral Analysis: Service Sector Leads in Lending

Microenterprise lending patterns varied across industries. The service sector emerged as the top borrower, securing 72,800 new loans totaling PLN 8.5 billion, reflecting a 3% year-on-year increase. Rising electricity and gas prices significantly impacted the profitability of service-oriented businesses such as catering, hospitality, and beauty salons. However, the growing demand for experience-based services and increased income in this sector partially offset these challenges.

Commercial enterprises ranked second, receiving 33,700 loans amounting to PLN 5.72 billion, an 11.8% year-on-year decline. The sluggish retail sector, with sales increasing by just 2.7%, led consumers to cut discretionary spending, reducing the financial activity of micro-entrepreneurs in trade.

Manufacturing firms secured 15,200 loans worth PLN 3.16 billion, marking a 6.3% decline in loan count and a 7.3% drop in value. Rising labor costs, energy prices, supply chain disruptions, and a German economic slowdown posed significant challenges to Polish micro-manufacturers.

The construction industry, after years of high profitability, entered a slowdown in 2024. Loan values in this sector declined by 2.9% year-on-year to PLN 4.21 billion, with only 26,000 loans issued—a 3.7% drop. Workforce availability emerged as a key challenge, with competition for skilled labor driving up costs and pressuring margins.

Loan Repayment Quality and Risks

The quality of microenterprise loan repayments deteriorated, particularly for investment loans. At the end of 2024, 22% of investment loans were overdue by more than 90 days, an increase of 2.9 percentage points from the previous year. Investment loans became the second-most challenging loan type for micro-entrepreneurs to repay, after working capital loans (24.4% delinquency rate).

Conversely, slight improvements in loan repayment quality were observed in commercial, manufacturing, and construction sectors. The BIK Quality Index improved for commercial loans (+0.21), manufacturing loans (+0.32), and construction loans (+0.58), while the service sector experienced a marginal decline (-0.07).

Looking ahead to 2025, the microenterprise lending market remains uncertain, influenced by economic conditions, consumer confidence, and regulatory policies. While certain sectors show resilience, the broader market continues to face challenges in credit availability and repayment sustainability.

Source: BIK

Slovakia: Producer prices see varied trends in January 2025

The start of 2025 saw an acceleration in agricultural product price growth, while industrial producers continued to sell goods at lower prices compared to the previous year. Meanwhile, construction work prices increased at the slowest pace in more than three and a half years, marking the slowest growth since June 2021.

In January, agricultural producers experienced a significant rise in product prices, exceeding 7%, the highest increase since April 2023. In contrast, industrial producers sold goods at prices nearly 3% lower than a year ago.

Industrial Producer Prices

The prices of industrial producers for the domestic market were 2.5% lower year-on-year in January 2025. Only six of the 16 monitored industry sectors maintained lower prices. A significant factor in the overall decline was the 7.7% drop in energy prices. The production of coke and petroleum products also fell by 3.2%, while the prices in vehicle and metal production declined by 0.7%. On the other hand, water supply prices saw a 7.9% increase, and rubber and plastic production prices rose by 4.8%. In a month-on-month comparison, industrial producer prices for the domestic market increased by 0.4%.

For exports, industrial producer prices recorded a year-on-year increase of 1.4% and a month-on-month rise of 0.7%.

Agricultural Product Prices

In January 2025, agricultural product prices grew significantly by 7.6% year-on-year, with vegetable product prices increasing by 5.3%. Notably, cereals rose by 10.9%, pulses by 11.5%, and fruits and nuts by 14.3%. However, oilseeds and fruits experienced a slight decrease of 1.5%, while potato prices fell by 7.6%. Vegetable prices recorded a double-digit decline of 15.9%.

Animal product prices surged by 10.9% year-on-year, driven by increases in beef for slaughter, including calves (+6%), chicken eggs (+14%), and cow’s milk (+8.1%).

Construction Producer Prices

Construction work prices at the beginning of 2025 were 3.3% higher year-on-year and increased by 0.3% compared to December 2024. The cost of materials used in construction saw a month-on-month rise of 0.2% and was 1.9% higher year-on-year.

The data reflect mixed economic conditions, with agricultural and construction prices continuing their upward trajectory, while industrial producer prices remain under pressure from reduced energy and manufacturing costs.

Source: Statistical Office of the SR

Czech economy sees modest growth in Q4 2024

The Czech economy recorded moderate growth in the fourth quarter of 2024, with the gross domestic product (GDP) increasing by 0.7% quarter-on-quarter and 1.8% year-on-year, according to refined estimates. For the full year 2024, GDP rose by 1.0%.

Data from the Czech Statistical Office (CZSO) indicate that, after adjustments for price effects and seasonal factors, GDP in Q4 2024 was 0.7% higher than in the previous quarter and 1.8% higher compared to the same period in 2023.

Sectoral Performance and Gross Value Added

The gross value added (GVA) showed stagnation on a quarterly basis but increased by 1.1% year-on-year. In a quarter-on-quarter comparison, the strongest sectors included manufacturing (+1.0%), trade, transportation, accommodation, and food service activities (+0.4%), and real estate activities (+2.2%).

Year-on-year, the most significant contributors to GVA growth were trade, transportation, accommodation, and food services, which added 0.5 percentage points with a 3.0% increase, and real estate activities, which contributed 0.3 percentage points with a 2.1% rise. Construction also expanded, growing by 2.4% year-on-year. However, the industrial sector negatively impacted GVA growth, reducing it by 0.6 percentage points due to a 2.2% decline.

Demand-Side Factors Influencing Growth

On the demand side, higher household final consumption expenditure and changes in inventories played key roles in the quarter-on-quarter GDP increase. However, gross fixed capital formation and declining external demand had a negative effect, according to Vladimír Kermiet, Director of the National Accounts Department at CZSO.

Year-on-year GDP growth of 1.8% was mainly driven by household final consumption expenditure (+1.9 percentage points), government final consumption expenditure (+0.6 percentage points), and changes in inventories (+1.6 percentage points). Meanwhile, gross fixed capital formation (-0.7 percentage points) and external demand (-1.7 percentage points) contributed negatively.

Household final consumption expenditure increased by 1.5% quarter-on-quarter and 3.2% year-on-year, with non-durable goods purchases leading the growth. Government consumption decreased by 0.3% on a quarterly basis but rose by 3.2% year-on-year.

Gross fixed capital formation declined by 1.5% quarter-on-quarter and 2.4% year-on-year. Year-on-year growth was observed in investments in buildings, structures, and transport equipment, while other asset investments declined. The change in inventories amounted to CZK -79.5 billion, which was CZK 10.5 billion higher than in the same period in 2023.

Trade and Employment Trends

The international trade balance of goods and services at current prices stood at CZK 129.2 billion, an increase of CZK 5.1 billion compared to Q4 2023. Exports decreased by 1.5% quarter-on-quarter but rose by 1.3% year-on-year, driven mainly by electronic and optical products and electrical equipment. In contrast, exports of machinery, equipment, and motor vehicles declined. Imports fell by 1.8% quarter-on-quarter but grew by 3.1% year-on-year.

Regarding price developments in Q4 2024, the total GDP deflator increased by 0.3% quarter-on-quarter and 3.7% year-on-year.

Labour costs rose by 6.6% year-on-year in Q4 2024. Total employment decreased slightly by 0.1% quarter-on-quarter but showed a 0.2% increase year-on-year. The total number of hours worked remained unchanged compared to the previous quarter but grew by 0.5% year-on-year.

The data underscore the Czech economy’s resilience, albeit with challenges in industrial output and investment activity. Growth in household consumption and specific service sectors have helped sustain momentum despite external headwinds.

Source: Czech Statistical Office

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