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Morning Summary: Czech Economy Contracts By 2.1% in Q1

CZECHIA
  • Covid cases continue to gradually decrease with the 7D SMA of daily new cases dropping to 2,200 (and down from 12,300 from its early March highs). Therefore, the Czech government approved the reopening of primary schools on May 3 and all stores from May 10.
  • The political uncertainty keeps rising as thousands of Czechs protested against President Milos Zeman's pro-Russian stance during the country's diplomatic feud with Moscow according to Bloomberg.
  • This morning, economic data showed that Czech economy contracted 0.3% in Q1 from the previous quarter and declined 2.1% YoY, which was slightly better than expected (-2.6% YoY exp.).
  • Despite the significant drop in the economic activity in the first quarter (due to the worsening Covid19 situation), economists are still expecting Czech GDP to increase by up to 4% in 2021.
  • The Finance Ministry showed that non-resident holders owned 33.25% of Czech government CZK-denominated bonds at the end of March, up from 32.7% from a month earlier.

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