PRAGUE, March 11 (Reuters) - The Czech economy shrunk by 0.9 percent in the final quarter of the last year, a worse result than the previously reported 0.6 percent fall due to new data on the banking sector and government sectors.
The Czech Statistical Bureau (CSU) said on Wednesday the quarterly drop put year-on-year gross domestic product growth at 0.7 percent, down from the +1.0 percent reported in a flash estimate released on Feb. 13. [ID:nPRA002417]
The quarterly data was the worst since 1997 as the global crisis cut into exports, the main source of rapid growth in recent years, and the revision reflected wider-based weakness as banks reported worse results.
"The main reason for the revision was ... that we relied on a segment we did not have data for, banks. The results were significantly worse than expected," said Jan Heller, in charge of GDP statistics at the CSU.
The CSU said growth was driven mainly by farming and retail, while manufacturing, business services and the financial sector contracted.
Despite worse profits at some banks, the country's financial sector has largely withstood the financial crisis so far, with no collapses nor need for a bailout.
But manufacturing, dependent on west European demand, slumped.
CSU chief Jan Fischer said the economy was going through the most forceful changes on record but remained on its feet.
"Despite these changes, the economy is not losing balance, both internal and external," he told a news conference.
Bank CSOB analyst Petr Dufek said it was clear the economy was entering a recession and the central bank may need to cut interest rates further from 1.75 percent.
"The downward revision is significant so overall it is obvious that the economy is hit by the recession in Europe in a greater degree," he said.
"We are now on the downward path and the bottom is far. Inflation is falling and the crown will gradually recover so rates will go down in the course of time."
The crown currency firmed to 26.700 to the euro
The CSU also revised down data for the second and third quarters, putting full-year growth at 3.1 percent, down from the previously reported 3.5 percent. (Reporting by Jan Lopatka, editing by Mike Peacock)