Capital City: Prague
	It is %T:%M %A in Prague

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Economic trends

Czech Republic is one of most developed and industrialized economies in the Central and East European countries. Being a small, open economy in the heart of Europe, its economic growth is strongly influenced by demand for exports and inflow of foreign direct investment. The country’s GDP growth rate is estimated at 6.4% in 2006. Nevertheless the trend is slowing down : 5.6% in 2007 and 4.6% in 2008 (as IMF forecast). Domestic demand will not drive economic expansion any more, as net trade will provide less of a stimulus to growth due to slower import demand in the euro zone. Inflation is still under control (2.9% in 2006) but public funds are phasing out and budget deficit is widening. However, the government has committed itself to reducing the deficit to 3% of GDP by 2008 to meet the Maastricht requirements for adoption of the euro in the year 2010.

Main branches of industry

The agriculture sector has gone through a serious of crisis situations in the 90s and is even today highly subsidized in this former communist country. The agricultural sector generates 3.5% of the country’s GDP and employs nearly 4% of the active population. The main agricultural products are sugar beets, potatoes, wheat, barley and hops. The manufacturing sector constitutes 40% of the country’s GDP and is mainly privatized. One of the principal industrial sectors in the country is the automobile sector, with Skoda (Volkswagen company) being a well know brand. Foreign investors such as Toyota and PSA have also started producing cars in the Czech Republic from 2005 onwards. However, this sector has now reached a point of saturation. Textile sector is becoming very dynamic. The tourism sector is in full boom, thanks particularly to the city of Prague being a strong tourist attraction centre.

International trade

After becoming a European Union (EU) member in May 2004, most barriers to trade in industrial goods with the EU fell in the course of the accession process which resulted into increased competition for Czech producers coupled with stronger regulations and rising labour costs. The country's top three export partners are: Germany, Slovakia and Austria. The commodities mainly exported are machinery, vehicles, electric & electronic equipment, and iron & steel. Its top three import partners are: Germany, Russia and Slovakia. Czech Republic mainly imports machinery, electric & electronic equipment, mineral fuels & oils, vehicles, and plastics.