Czech economy keeps fast growth, consumption leads

...growth is strong but cooling slightly with rising inflationary pressures.

The Czech Statistical Bureau (CSU) said the growth, even with a revised fourth quarter figure of 6.1 percent, was driven mainly by household demand.

The data were exactly in line with expectations in a Reuters poll of analysts, and the growth pace was flat from the last quarter of 2006.

"On the supply side, the rising demand is being secured by growth in production and added value, mainly in the processing industry, construction and trade," the CSU said.

A separate set of data showed inflation dipped to 2.4 percent in May from 2.5 percent in June.

But analysts said the trend was still toward higher price growth which would require further tightening of monetary policy after a 25 basis point interest rate rise last month.

"Both the dynamics of GDP and its structure on the expenditure side are pointing to growing inflationary risks in Czech economy," said Radomir Jac, an analyst at PPF Asset Management. "As such they are sending signals to the Czech central bank to normalise their interest rates further from the current low levels."

The crown currency was flat after the data at 28.46 to the euro .