PRAGUE: Czech second quarter gross domestic product data showing a continued recession are a downside risk to the central bank's latest macroeconomic forecast, which projects lower interest rates in the next several quarters, the bank said on Friday.
The data showed the economy shrank by 0.2 percent in the second quarter from the previous three months, extending a recession that started at the end of 2011.
It fell by 1.0 percent year on year. The central bank expected the economy to fall by 0.4 percent year on year.
Household consumption's fall of 1.1 percent versus the previous quarter was worse than expected, but fixed investment, which rose 7 percent, was a positive surprise, the bank said.
The bank is to decide on interest rates on Sept. 27 and many analysts have said the worse-than-expected GDP data was reason for another cut in the record low key two-week repo rate currently at 0.5 percent.
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