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CONSULTING

CZECH REPUBLIC



Area: 78,866 sq km
Capital City: Prague, (pop. 1.21 million)
Population: 10.38 million
Annual growth: 0.1%
Languages: Czech
Literacy: 99.8%
Government type: Parliamentary republic
Neighbouring countries: Germany, Poland, Slovakia, Austria
Memberships: NATO; EU; IMF; Interpol; OSCE; OECD; UN; UNCTAD; UNESCO; WEU (associate)
Currency: Czech Crown (CZK) / £1 = approx. CZK 32 (May 2008)


TARGET SECTORS

• Advanced engineering
• Automotive
• Biotechnology
• Construction
• Consumer goods
• Design and Creative and media (film)
• Environmental
• Financial services
• Food and drink
• Healthcare
• Industrial textiles
• Training and education


ECONOMY

GDP: CZK 3,557BN (US$ 219bn) (2007)
Annual Growth: 6.6% (4Q, 2007)
GDP (PPP): $251 billion (2007 est.)
GDP per capita: $24,500 (2007 est.)
GDP - composition by sector: agriculture: 2.7%, industry: 38.7%, services: 58.6% (2007 est.)
Major industries: road vehicles, metallurgy, industrial and office machinery and equipment, electrical equipment
Inflation: 4.3% (March 2008)
Labor force (5.36 million): Industry, construction, and commerce--40%; government and other services--56%; agriculture--4%.
Unemployment: 4,5 % (2008)
Trade (2007) Exports: $113 billion (est.) / $122.3 billion f.o.b. (2007 est.):
Imports: $109.8 billion (est.) / $116.6 billion f.o.b. (2007 est.)
FDI: EUR 5 571 667.6 (3Q, 2008)

The Czech Republic is one of the most stable and prosperous of the post-Communist states of Central and Eastern Europe. Growth in 2000-07 was supported by exports to the EU, primarily to Germany, and a strong recovery of foreign and domestic investment. Domestic demand is playing an ever more important role in underpinning growth as the availability of credit cards and mortgages increases. The current account deficit has declined to around 3.3% of GDP as demand for automotive and other products from the Czech Republic remains strong in the European Union. Rising inflation from higher food and energy prices are a risk to balanced economic growth. Significant increases in social spending in the run-up to June 2006 elections prevented the government from meeting its goal of reducing its budget deficit to 3% of GDP in 2007. Negotiations on pension and additional healthcare reforms are continuing without clear prospects for agreement and implementation. Intensified restructuring among large enterprises, improvements in the financial sector, and effective use of available EU funds should strengthen output growth. The pro-business Civic Democratic Party-led government approved reforms in 2007 designed to cut spending on some social welfare benefits and reform the tax system with the aim of eventually reducing the budget deficit to 2.3% of GDP by 2010. Parliamentary approval for any additional reforms could prove difficult, however, because of the parliament's even split. The government withdrew a 2010 target date for euro adoption and instead aims to meet the Eurozone criteria around 2012.
map_czech_republic.jpg

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