Economic situation remains favourable

The picture of the economic situation remains favourable at the end of August. The heart of the indicators in the Business Cycle Tracer is still located in the high economic growth stage. All indicators in the Tracer are performing better than their long-term average.

In the second quarter, the volume of the gross domestic product (GDP) was 2.4 percent up on one year previously. This is similar to the growth in the first quarter of this year. Compared to 2006, economic growth was severely curbed. After adjustment for seasonal effects, GDP volume grew by 0.2 percent compared with the fourth quarter.

The growth of household consumption and investments slowed down. Export growth remained more or less the same. After two bumper quarters, the growth pace in manufacturing industry dropped considerably.

Consumers remained optimistic in August, consumer confidence was even slightly up. The mood indicator among manufacturers has remained consistently high for over a year now. The number of the business service providers expecting to receive more orders and to generate a higher turnover in the third quarter of this year exceeds those anticipating a decrease.

The capital market interest rate stood at 4.6 percent in July. Inflation decreased by 0.2 of a percentage point and averaged 1.5 percent in July. Selling prices in the manufacturing industry were 3.1 percent up on July 2006. The price increase has stabilised after six months of continuous increase.

In the period May–July, the seasonally adjusted unemployment rate stood at 356 thousand. In the second quarter of 2007, there were 225 thousand job vacancies. In the first quarter, there was a further rise in the number of hours worked in temp jobs. In the fourth quarter of 2006, there was a further increase in the number of jobs.

Gross domestic product (GDP)