The Czech economy slowed more than expected in the second quarter of 2018, as the European Union's tightest labour market dragged on the expansion and base effects distorted the results. Gross domestic product rose by 0.5 percent in April-June versus the previous three months, and by 2.3 percent year-on-year, a flash estimate published on Tuesday by the Czech Statistics Office showed.
The statistics office, which will publish detailed data on August 31, said that household consumption and companies' investment contributed the most to growth. Analysts polled by Reuters had expected the economy to slow down its annual pace of expansion to 2.6 percent from 4.2 percent in the first quarter, partly due to very strong growth in the second quarter of last year.
"(The slowdown) is to a large extent due to capacity limitations of the Czech economy, mostly manifested in the job market. Unfortunately, we don't see any strong productivity rise, which is necessary for further GDP growth," said Komercni Banka analyst Viktor Zeisel.
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