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flag Czech Republic Czech Republic: Economic and Political Outline

Economic Indicators | Foreign Trade in Figures | Sources of General Economic Information | Political Outline

Economic Indicators

The Czech Republic's economy is one of the most developed in Central and Eastern Europe. Its economic growth is strongly influenced by the demand on exports and foreign direct investment inflow. The country’s GNP growth which was increasing steadily over the past few years, experienced a strong drop in 2009 (-4.2%) due to the global recession.  The growth rate became positive again in 2010, stimulated by exports which shows that the Czech Republic's economy is in full expansion and that its basis is becoming solid.  The growth rate is estimated at 2% in 2010 and it should become stronger in 2011. 

Inflation remained under control but the public funds decreased and the budgetary deficit became larger.  In the context of the economic revival, the government has announced a program to reorganize its public finance for 2011.  Severe measures have already been taken in order to reduce expenditures (suppression of subsidies, freeze salaries, etc.) and to increase the revenues.  The objective is to bring the public deficit to 3% of the GDP by 2013, with the idea of meeting the Maastricht's requirements for the adoption of the Euro as its currency. 

The unemployment rate increased under the effect of the global crisis and it remained stable at 8% of the active population.

 
Main Indicators 2009201020112012 (e)2013 (e)
GDP (billions USD) 190.20192.03220.34232.70243.26
GDP (Constant Prices, Annual % Change) -4.12.32.0e1.82.5
GDP per Capita (USD) 18,17118,27720,925e22,05023,004
General Government Balance (in % of GDP) -4.3-3.6e-2.9-2.9-3.0
General Government Gross Debt (in % of GDP) 35.4e38.541.1e43.244.6
Inflation Rate (%) 1.01.5e1.8e2.02.0
Unemployment Rate (% of the Labor Force) 6.77.36.76.66.5
Current Account (billions USD) -6.20-7.19e-7.25e-7.81-5.74
Current Account (in % of GDP) -3.3-3.7e-3.3e-2.4-

Source: IMF - World Economic Outlook Database ; World Bank , Last Available Data

Note: (e) Estimated Data

Main Sectors of Industry

The agricultural sector went through a serious crisis in the 90s and, even today, it is still heavily subsidized.  It generates approximately 2% of the country’s GNP and employs more than 3% of the active population. The main agricultural products are sugar beets, potatoes, wheat, barley and hops. 

The production sector is mostly private, it accounts for almost 40% of the GNP and employs 40% of the active population.  The growth at the level of performance was parallel to the increase in manpower's productivity.  One of the main manufacturing sectors is the auto industry, with Skoda (Volkswagen company).  Foreign investors such as Toyota and PSA also started producing cars in the Czech Republic since 2005.  However, this sector has now reached a saturation point. Nearly 10,000 jobs were eliminated in 2009 because of the international crisis. The textile sector is becoming very dynamic. 

Services contribute to 60% of the GDP and employ more than half of the active population.  The tourism sector is booming, thanks to the city of Prague, in particular, which is a very attractive tourist center.

 
Breakdown of Economic Activity By Sector Agriculture Industry Services
Employment By Sector (in % of Total Employment) 3.1 38.6 58.3
Value Added (in % of GDP) 2.3 37.2 60.5
Value Added (Annual % Change) 5.0 -13.1 1.5

Source: World Bank - Last Available Data.

 
 
Monetary Indicators 20062007200820092010
Czech Crown (CZK) - Average Annual Exchange Rate For 1 USD 22.6020.2917.0719.0619.10

Source: World Bank - Last Available Data.

 
 
Learn more about Market Analysis about the Czech Republic on Globaltrade.net, the Directory for International Trade Services.
 

Indicator of Economic Freedom

Score:
70.4/100
Position:
Mostly free
World Rank:
28/179
Regional Rank:
15/42

Distribution of Economic freedom in the world
Source: 2011 Index of Economic freedom, Heritage Foundation

 

Country Risk

See the Country Risk Analysis Provided By Ducroire.

 

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Foreign Trade in Figures

The Czech Republic's economy is very open to foreign investment. Trade represented more than 145% of the GDP in 2009. Its membership to the European Union allowed the Czech Republic to enter into the common market and to consolidate its position as a low-cost production base. 80% of the country's trade is now conducted with the OECD countries (of which 80% is with EU countries).  A certain number of agreements made it easier to trade with neighboring countries (CEFTA). The country has recorded a structural positive trade balance since it became a member of the European Union, a trend that should continue.

 
Foreign Trade Indicators 20062007200820092010
Imports of Goods (million USD) 93,191118,169142,038105,048126,185
Exports of Goods (million USD) 94,929122,498146,799112,956132,971
Imports of Services (million USD) 11,82814,29417,75418,73124,020
Exports of Services (million USD) 13,86516,79921,69420,21122,298
Imports of Goods and Services (Annual % Change) 14.314.34.7-10.2-
Exports of Goods and Services (Annual % Change) 15.815.06.0-10.2-
Imports of Goods and Services (in % of GDP) 73.075.172.563.8-
Exports of Goods and Services (in % of GDP) 76.480.177.169.5-
Trade Balance (million USD) 2,8435,9136,3344,2312,814
Trade Balance (Including Service) (million USD) 4,8428,35310,2467,6786,259
Foreign Trade (in % of GDP) 149.4155.1149.6133.4-

Source: WTO - World Trade Organization ; World Bank , Last Available Data

 

Main Partner Countries

Main Customers
(% of Exports)
2010
Germany 31.9%
Slovakia 8.8%
Poland 6.2%
France 5.4%
United Kingdom 4.9%
See More Countries 42.9%
Main Suppliers
(% of Imports)
2010
Germany 25.5%
China 12.2%
Poland 6.4%
Russia 5.4%
Slovakia 5.2%
See More Countries 45.3%

Source: Comtrade, Last Available Data

 

Main Products

Main Exports
(% of Exports)
2010
Motor cars and other motor vehicles principally...Motor cars and other motor vehicles principally designed for the transport of persons, incl. station wagons and racing cars (excl. motor vehicles of heading 8702) 9.5%
Automatic data processing machines and units...Automatic data processing machines and units thereof; magnetic or optical readers, machines for transcribing data onto data media in coded form and machines for processing such data, n.e.s. 6.5%
Parts and accessories for tractors, motor vehicles...Parts and accessories for tractors, motor vehicles for the transport of ten or more persons, motor cars and other motor vehicles principally designed for the transport of persons, motor vehicles for the transport of goods and special purpose motor vehicles of heading 8701 to 8705, n.e.s. 6.5%
Television receivers, whether or not incorporating...Television receivers, whether or not incorporating radio-broadcast receivers or sound or video recording or reproducing apparatus; video monitors and video projectors 2.3%
Insulated "incl. enamelled or anodised" wire,...Insulated "incl. enamelled or anodised" wire, cable "incl. coaxial cable" and other insulated electric conductors, whether or not fitted with connectors; optical fibre cables, made-up of individually sheathed fibres, whether or not assembled with electric conductors or fitted with connectors 1.7%
See More Products 73.6%
Main Imports
(% of Imports)
2010
Automatic data processing machines and units...Automatic data processing machines and units thereof; magnetic or optical readers, machines for transcribing data onto data media in coded form and machines for processing such data, n.e.s. 4.8%
Parts and accessories for tractors, motor vehicles...Parts and accessories for tractors, motor vehicles for the transport of ten or more persons, motor cars and other motor vehicles principally designed for the transport of persons, motor vehicles for the transport of goods and special purpose motor vehicles of heading 8701 to 8705, n.e.s. 4.5%
Petroleum oils and oils obtained from bituminous...Petroleum oils and oils obtained from bituminous minerals, crude 3.5%
Petroleum gas and other gaseous hydrocarbonsPetroleum gas and other gaseous hydrocarbons 3.2%
Parts and accessories (other than covers, carrying...Parts and accessories (other than covers, carrying cases and the like) suitable for use solely or principally with machines of heading 8469 to 8472, n.e.s. 2.6%
See More Products 81.4%

Source: Comtrade, Last Available Data

 
See More Products
More imports (Intracen Data)
More exports (Intracen Data)
 

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Sources of General Economic Information

Ministries
Ministry of Agriculture
Ministry of Foreign Affairs
Ministry of Industry and Trade
Ministry of Finance
Statistical Office
Czech National Statistical Office  
Central Bank
Czech National Bank  
Stock Exchange
Prague Stock Exchange
Czech capital market association
Search Engines
Atlas
Best
Katalog
O² Active
Superzoznam
Surf
Economic Portals
Czech Happenings, Czech Press Bureau (in Czech and in english)
Businessinfo.cz, Czech business web portal
Financni Noviny, News in English

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Political Outline

Executive Power
President is the chief of the state and is elected by the parliament for a five-year term. President has limited specific powers, most important of them being power to return laws to the parliament and dissolving of the parliament under certain special conditions. President appoints the Prime Minister and the Cabinet on the recommendation of the Prime Minister. Prime Minister is the head of the government and also holds the executive powers which include implementation of the law in the country and running the day-to-day affairs. Prime Minister is generally the head of the majority party or coalition in the parliament and yields considerable political power.
Legislative Power
The legislature is bicameral. The parliament consists of: Senate (the upper house), its members elected by popular vote to serve six-year terms and the Chamber of Deputies (the lower house) with its members elected by popular vote to serve four-year terms. The executive branch of government is directly or indirectly dependent on the support of the parliament, often expressed through a vote of confidence Prime Minister cannot dissolve the parliament without taking President and the members of the parliament into confidence.
Main Political Parties
Czech Republic has a multi-party political system. The main political parties in the country are:
- CSSD (Czech Social Democratic Party) – defends a socially oriented state with a market economy;
- ODS (Civic Democratic Party) – a liberally conservative party, on the right of the political spectrum. It defends the principles of personal freedom and individual responsibility, entrepreneurship and private ownership;
- KSCM (Communist Party of Bohemia and Moravia) - heir of the Communist party of Czechoslovakia, though it has now modified its programme to suit country's new democratic politics;
- KDU-CSL (Christian Democratic Union-Czechoslovak People's Party) – a conservative political party which draws its main support from the Catholic rural areas in Moravia, in the center of the political spectrum ;
- Green Party (SZ) - highlights through its program the topic of ecology.
Current Political Leaders
President: Vaclav KLAUS (since March 2003) – ODS
Prime Minister: Petr NECAS (since June 2010) – ODS
Next Election Dates
Presidential: February 2013
Chamber of Deputies: 2014
 

Indicator of Freedom of the Press

World Rank:
24/178
Evolution:
same place compared to 2009

Source: Worldwide Press Freedom Index 2010, Reporters Without Borders

 

Indicator of Political Freedom

Ranking:
Free
Political Freedom:
1/7
Civil Liberties:
1/7

Map of freedom 2010

 

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Last Updates: January 2012