Sales in services rose by slower 0.6% y/y in Q3 after the upwards revised 1.1% y/y growth reported in Q2, according to the constant price data released by the Czech stats office today. This slowdown was driven by the fact that sales growth in one of the main segments transportation and storage fell by 0.9% y/y in Q3 after the downwards revised 2.6% y/y growth reported in Q2. ICT sales expansion halved q/q, while the pace of increase of administrative and support services decelerated significantly. These developments could not be compensated by the seeding up increase in sales in hotels and restaurants to 6.3% y/y in Q3.
Overall, recent data indicate GDP growth slowing down in Q3 from the 2.6% y/y increase in Q2 as industry and retail sales expansion in Jul-Sep slowed down from the growths reported in Apr-Jun, construction remained deep at negative territory and services’ sales expansion decelerated. Some positive influence might have come from tourism, which reported accelerating annual increase of both number of tourists and overnight stays. Flash Q3 GDP estimate is due on Nov 15, while detailed data – on Dec 2. The CNB’s latest forecast assumes GDP growth to slightly decelerate to 2.5% y/y in Q3, but to speed up to 3.1% y/y in Q4 and further to 3.4% y/y in Q1 2017.