Czech economy officially in recession after second quarter of contraction

The Czech economy is officially in recession, after GDP fell for the second consecutive quarter in the first three months of 2009. The economy shrank by 3.4 percent year-on-year in the quarter, the Czech Statistical Office said on Tuesday, after a revision confirmed its estimate from May. The poor figures have been blamed on a decline in the manufacturing sector; the Czech Republic is heavily dependent on the car industry. The Czech National Bank forecasts a 2.4 percent contraction for the whole of this year.

Meanwhile, consumer inflation hit a 28-month low in May: the 1.3 percent year-on-year inflation recorded last month was the lowest seen since January 2007, according to official data.