Czech Republic: Sharp fall in inflation

Real GDP is contracting, largely reflecting a specialisation in export-dependent manufacturing. Falling investment and recession in major export markets are contributing to a sharp downturn this year, followed by a weak recovery in 2010, driven by the gradual pick-up of private consumption and export demand.

Inflation is set to fall sharply, reflecting both the global recession and slower growth of administered prices.

The government has responded to the downturn with two stimulus packages, but there is little room for further discretionary fiscal easing. Monetary policy has been relaxed gradually since August 2008, and additional interest rate cuts are possible. Measures to ease the regulatory burden on business could also reduce the pressure on the enterprise sector without raising the fiscal deficit.

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See also www.oecd.org/czech

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©OECD Observer No 274, July 2009




Economic data

GDP growth: +0.2% Q4 2019
Consumer price inflation: 2.3% January 2020
Trade (G20): -0.1% exp, -1.3% imp, Q4 2019
Unemployment: 5.1% January 2020
Last update: 11 March 2020

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