Euro-area target 2009
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Activity is broadening and growth close to 5% over the projection horizon exceeds previous expectations. Headline inflation will drop significantly from currently high levels once the effects of administered price adjustments, tax reform and food price increases related to EU accession start to fade in 2005. Unemployment will also begin to fall to a rate of 16% by the end of 2006.
For fiscal policy to remain credibly committed to the adoption of the euro in 2009, the substantial government spending cuts already budgeted should be implemented as planned. The monetary authorities should specify and communicate their strategy for euro-area entry as soon as oneoff effects on inflation dissipate.
| Population (000s), 2003 | 5 380 |
| Area (000 sq km) | 49 |
| Currency | Koruna |
| GDP (Billion USD), 2003 | 32.5 |
| Life expectancy at birth (Women, Men), 2002 | 77.8, 69.9 |
| Total labour force (000s), 2003 | 2 634 |
| Government type | Parliamentary Democracy |
| Indicators | % change unless otherwise indicated |
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| 2004 | 2005 | 2006 |
|---|
| GDP growth | 4.9 | 4.8 | 5.0 |
| Consumer price index | 7.7 | 3.6 | 3.1 |
| Short-term interest rate (%) | 4.6 | 4.4 | 4.1 |
| Unemployment rate (%) | 18.2 | 17.5 | 16.5 |
| General government financial balance (% GDP) | -3.9 | -3.8 | -3.9 |
| Current account balance (% GDP) | -2.6 | -3.0 | -1.9 |
Source: OECD©
OECD Observer No 245, November 2004
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