PRAGUE: A nascent recovery faltered in the Czech Republic as its economy shrank by 0.5 percent in the third quarter after shaking off a record 18-month recession, official data showed on Thursday.
Analysts had widely expected a third-quarter expansion of around 0.5 percent, but weak investment and domestic consumption as well as higher imports took their toll.
The economy had recovered in the previous three months.
"After a good second-quarter result, this is a cold shower," Petr Dufek, an analyst with Czech bank CSOB, told AFP.
The Czech Statistical Office said economic growth contracted by 0.5 percent on a quarterly basis and by 1.6 percent annually on seasonally adjusted figures.
The Czech economy, central Europe's third-largest after Poland and Austria, clocked 0.6 percent in the second quarter to emerge from the record recession.
The Czech central bank last week began intervening on the forex market to weaken the koruna currency and mitigate the risk of deflation in the fragile economy.
A weaker koruna will likely benefit exporters in this EU member of 10.5 million people heavily dependent on car production and exports to the eurozone.
It posted an 0.9-percent economic contraction in 2012 and is forecast to shrink by 1.5-percent this year with a rebound to 2.1-percent growth in 2014.
The country has seen its fare share of political turmoil over the last year with the collapse of a centre-right coalition amid an unprecedented bribery and corrpution scandal.
Analysts maintain that the fragmented result of the October snap election in which the leftwing Social Democrats scored a narrow victory could result in yet another wobbly coalition government.
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