Economy of the Czech Republic

Economy - overview: Political and financial crises in 1997 shattered the Czech Republic's image as one of the most stable and prosperous of post-Communist states. Delays in enterprise restructuring and failure to develop a well-functioning capital market played major roles in Czech economic troubles, which culminated in a currency crisis in May. The currency was forced out of its fluctuation band as investors worried that the current account deficit, which reached nearly 8% of GDP in 1996, would become unsustainable. After expending $3 billion in vain to support the currency, the central bank let it float. The growing current account imbalance reflected a surge in domestic demand and poor export performance, as wage increases outpaced productivity. The government was forced to introduce two austerity packages later in the spring which cut government spending by 2.5% of GDP. Growth dropped to 0.3% in 1997, -2.3% in 1998, and -0.5% in 1999. The basic transition problem continues to be too much direct and indirect government influence on the privatized economy. The government established a restructuring agency in 1999 and launched a revitalization program - to spur the sale of firms to foreign companies. Key priorities include accelerating legislative convergence with EU norms, restructuring enterprises, and privatizing banks and utilities. The economy, fueled by increased export growth and investment, is expected to recover in 2000.

GDP: purchasing power parity - $120.8 billion (1999 est.)

GDP - real growth rate: -0.5% (1999 est.)

GDP - per capita: purchasing power parity - $11,700 (1999 est.)

GDP - composition by sector:
agriculture: 5%
industry: 42%
services: 53% (1999 est.)

Population below poverty line: NA%

Household income or consumption by percentage share:
lowest 10%: 4.6%
highest 10%: 23.5% (1993)

Inflation rate (consumer prices): 2.5% (1999 est.)

Labor force: 5.203 million (1999 est.)

Labor force - by occupation: industry 32%, agriculture 5.6%, construction 8.7%, transport and communications 6.9%, services 46.8% (1997 est.)

Unemployment rate: 9% (1999 est.)

Budget:
revenues: $16.4 billion
expenditures: $17.3 billion, including capital expenditures of $NA (1999)

Industries: fuels, ferrous metallurgy, machinery and equipment, coal, motor vehicles, glass, armaments

Industrial production growth rate: -4% (1999 est.)

Electricity - production: 61.466 billion kWh (1998)

Electricity - production by source:
fossil fuel: 75.54%
hydro: 2.55%
nuclear: 20.37%
other: 1.54% (1998)

Electricity - consumption: 54.733 billion kWh (1998)

Electricity - exports: 10.8 billion kWh (1998)

Electricity - imports: 8.37 billion kWh (1998)

Agriculture - products: grains, potatoes, sugar beets, hops, fruit; pigs, cattle, poultry; forest products

Exports: $26.9 billion (f.o.b., 1999)

Exports - commodities: machinery and transport equipment 41%, other manufactured goods 40%, chemicals 8%, raw materials and fuel 7% (1998)

Exports - partners: Germany 42%, Slovakia 8%, Austria 6%, Poland 6%, France 4% (1999)

Imports: $29 billion (f.o.b., 1999)

Imports - commodities: machinery and transport equipment 39%, other manufactured goods 21%, chemicals 12%, raw materials and fuels 10%, food 5% (1998)

Imports - partners: Germany 34%, Slovakia 6%, Russia 6%, Austria 6%, France 5% (1999)

Debt - external: $24.3 billion (1999 est.)

Economic aid - recipient: $351.6 million (1995)

Currency: 1 koruna (Kc) = 100 haleru

Exchange rates: koruny (Kcs) per US$1 - 35.630 (December 1999), 34.569 (1999), 32.281 (1998), 31.698 (1997), 27.145 (1996), 26.541 (1995)

Fiscal year: calendar year

See also : Czech republic