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Home > Country Profiles > Czech Republic

Country Profiles

Czech Republic - Economy

Whitaker's Almanack Version

Financial Outlook

The Czech Republic entered recession in late 2011 and only began to show signs of recovery in early 2014. Weak domestic demand—reflecting three years of fiscal austerity measures, as well as subdued export growth due to the economic slowdown in the Eurozone—weighed on the economy. The central bank has taken measures to boost growth. In November 2012 it cut its benchmark interest rate to 0.05%, and in November 2013 intervened in the foreign currency markets to weaken the Czech koruna in a bid to import inflation. The central bank feared that the economy could fall into deflation, with prices rising at less than the central bank’s target rate range of 1% to 3%. In January 2014 the central bank revised upward Czech third-quarter economic output for 2013, which grew on a quarterly basis by 0.2%, compared with earlier figures that showed a 0.1% contraction. However, the country’s unemployment rate rose from 7.7% in November 2013 to 8.2% in December. The Czech central bank is forecasting growth of above 2% in 2014, supported by growing exports as the Eurozone recovers, albeit modestly.

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