The Czech economy continued to shrink in the second quarter as households cut consumption and the government reduced spending, fueling the second recession since 2009.
Gross domestic product fell 0.2 percent from the previous quarter, the third consecutive contraction, compared with a revised 0.6 percent decline in the first three months of the year, the Czech Statistics Office said in a statement on its website. GDP fell 1 percent from a year ago.
The Czech economy is suffering from weak domestic demand as the government cut investments and raised sales taxes to trim the budget deficit below the European Union’s limit of 3 percent of GDP. Foreign trade remains in surplus, though the EU’s debt crisis has curbed demand for cars and electronics as the 27- nation bloc buys 80 percent of Czech exports, including from companies such as carmaker Skoda Auto AS.
Household spending and government consumption both fell 1.1 percent in the second quarter from the first three months, the statistics office said.
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