Inflation risks
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Driven by buoyant exports and strong private investment, output growth has gained momentum and should reach about 4% this year, and in 2005 and 2006. Employment growth is likely to be muted, though nevertheless allowing for a slight decline in unemployment. Inflation will remain close to 3%.
The momentum of fiscal reform needs to be boosted. A new budgeting framework has been introduced and needs to be effectively implemented. Also, concrete progress is needed on pension and healthcare reform. Monetary policy looks set to remain neutral in the near term, although there are upside risks to inflation. Structural reforms to improve the business environment are needed to enable rapid real convergence.
| Population (000s), 2003 | 10 202 |
| Area (000 sq km) | 79 |
| Currency | Koruna |
| GDP (Billion USD), 2003 | 85.4 |
| Life expectancy at birth (Women, Men), 2002 | 78.7, 72.1 |
| Total labour force (000s), 2003 | 5 132 |
| Government type | Parliamentary Democracy |
| Indicators | % change unless otherwise indicated |
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| 2004 | 2005 | 2006 |
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| GDP growth | 3.9 | 4.2 | 4.1 |
| Consumer price index | 2.9 | 3.1 | 3.0 |
| Short-term interest rate (%) | 2.4 | 3.0 | 3.2 |
| Unemployment rate (%) | 8.4 | 8.3 | 8.2 |
| General government financial balance (% GDP) | -4.3 | -4.6 | -3.9 |
| Current account balance (% GDP) | -6.5 | -6.6 | -6.5 |
Source: OECD©
OECD Observer No 245, November 2004
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