Economy of the Czech Republic
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{| border=1 cellspacing=0 cellpadding=4 width=300 style="float:right; border:1px solid gray; border-collapse:collapse; font-size:90%; margin:0 0 .5em 1em;"
!align="center" bgcolor="lightblue" colspan="3"|<big>Economy of the Czech Republic</big>
|-
!align="left" valign="top"|Currency
|colspan="2" valign="top"|1 [[Czech koruna]] (Kč)
|-
!align="left" valign="top"|Fiscal year
|colspan="2" valign="top"|calendar year
|-
!align="left" valign="top"|Trade organizations
|colspan="2" valign="top"|[[European Union|EU]], [[WTO]] and [[OECD]]
|-
!align="center" bgcolor="lightblue" colspan="3"|Statistics
|-
!align="left" valign="top"|[[Gross domestic product|GDP]] ranking
|colspan="2" valign="top"|[[List of countries by GDP (nominal)|39th]] by nominal volume; [[List of countries by GDP (nominal) per capita|39th]] by nominal volume per capita; [[List of countries by GDP (PPP)|41st]] by volume adjusted for [[Purchasing Power Parity|PPP]]; [[List of countries by GDP (PPP) per capita|36th]] per capita adjusted for PPP (2004)
|-
!align="left" valign="top"|GDP PPP
|colspan="2" valign="top"|$225.5 billion (2006)
|-
!align="left" valign="top"|GDP growth rate
|colspan="2" valign="top"|6.4% (2006)
|-
!align="left" valign="top"|GDP per capita
|colspan="2" valign="top"|$22,000 (2005 est.)
|-
!align="left" valign="top"|GDP by sector
|colspan="2" valign="top"|agriculture (3.4%), industry (39.3%), services (57.3%) (2004)
|-
!align="left" valign="top"|[[Inflation]] rate
|colspan="2" valign="top"|7.1% (March 2008)
|-
!align="left" valign="top"|Pop below [[poverty line]]
|colspan="2" valign="top"|N/A
|-
!align="left" valign="top"|Labour force
|colspan="2" valign="top"|5.25m (2004)
|-
!align="left" valign="top"|Labour force by occupation
|colspan="2" valign="top"|services (58.7%), industry (37.6%), agriculture (3.7%) (2006)
|-
!align="left" valign="top"|[[Unemployment]]
|colspan="2" valign="top"|4.7% (Q1 2008)
|-
!align="left" valign="top"|Main industries
|colspan="2" valign="top"|[[motor vehicles]] and parts, machine tools, [[electric power]] equipment, [[metals]], [[Chemical industry|chemicals]], [[coal]], [[food processing]], [[glass]], [[beverages]], [[tourism]]
|-
!align="center" bgcolor="lightblue" colspan="3"|Trading partners
|-
!align="left" valign="top"|Exports
|colspan="2" valign="top"|$66.5bn (2004)
|-
!align="left" valign="top"|Main partners
|colspan="2" valign="top"|[[Germany]] 36.1%, [[Slovakia]] 8.4%, [[Austria]] 6%, [[Poland]] 5.3%, [[United Kingdom|UK]] 4.7%, [[France]] 4.7%, [[Italy]] 4.3%, [[Netherlands]] 4.3% (2004)
|-
!align="left" valign="top"|Imports
|colspan="2" valign="top"|$68.2bn (2004)
|-
!align="left" valign="top"|Main partners
|colspan="2" valign="top"|[[Germany]] 31.7%, [[Slovakia]] 5.4%, [[Italy]] 5.3%, [[People's Republic of China]] 5.2%, [[Poland]] 4.8%, [[France]] 4.8%, [[Russia]] 4.1% (2004)
|-
!align="center" bgcolor="lightblue" colspan="3"|Public finances
|-
!align="left" valign="top"|Public debt
|colspan="2" valign="top"|33.1% of GDP (2005)
|-
!align="left" valign="top"|External debt
|colspan="2" valign="top"|$43.2bn ( [[30 June]] [[2005]] est.)
|-
!align="left" valign="top"|Revenues
|colspan="2" valign="top"|$48.16bn (2005 est.)
|-
!align="left" valign="top"|Expenses
|colspan="2" valign="top"|$53.04bn (2005 est.)
|-
!align="left" valign="top"|Economic aid
|colspan="2" valign="top"|$2.4bn from EU funds (2004-06)
|}
Of the emerging democracies in [[Central Europe|central]] and [[eastern Europe]], the [[Czech Republic]] has one of the most developed industrialized [[Economic system|economies]]. It is one of the most stable and prosperous of the post-Communist states of Central and Eastern Europe.
The principal industries are heavy and general machine-building, [[iron]] and [[steel]] production, metalworking, [[chemistry|chemical]] production, [[electronics]], transportation equipment, [[textile]]s, [[glass]], brewing, china, [[ceramic]]s, and [[pharmaceutical]]s. Its main agricultural products are [[sugarbeet]]s, [[fodder root]]s, [[potato]]es, [[wheat]], and [[hops]].
==History==
{{see|Economy of Czechoslovakia}}
Its strong industrial tradition dates to the 19th century, when [[Bohemia]] and [[Moravia]] were the economic heartland of the [[Austro-Hungarian Empire]]. Today, this heritage is both an [[asset]] and a [[liability]]. The Czech Republic has a well-educated population and a well-developed [[infrastructure]], but its industrial plants and much of its industrial equipment are obsolete.
According to the [[Stalin]]ist development policy of planned interdependence, all the economies of the [[socialist]] countries were linked tightly with that of the [[Soviet Union]]. With the disintegration of the communist economic alliance in 1991, Czech manufacturers lost their traditional markets among former communist countries to the east.
==1990-1995==
{{cleanup-rewrite}}
The "[[Velvet Revolution]]" in 1989 offered a chance for profound and sustained economic reform. Signs of economic resurgence began to appear in the wake of the [[Shock therapy (economics)|shock therapy]] that the [[International Monetary Fund]] (IMF) labelled the "big bang" of January 1991. Since then, astute economic management has led to the liberalization of 95% of all price controls, annual inflation in the 10% range, modest [[budget deficit]]s, low [[unemployment]], a positive [[balance of payments]] position, a stable [[exchange rate]], a shift of exports from former [[Eastern bloc|communist economic bloc]] markets to [[Western Europe]], and relatively low [[foreign debt]].
Particularly impressive have been the republic's strict [[fiscal policy|fiscal policies]]. Following a series of currency [[devaluation]]s, the [[koruna|crown]] has remained stable in relation to the [[United States dollar|U.S. dollar]]. The Czech crown became fully [[convertibility|convertible]] for most business purposes in late 1995.
In addition, the government has revamped the legal and administrative structure governing [[investment]] in order to stimulate the economy and attract foreign partners. Shifting emphasis from the East to the West has necessitated restructuring existing facilities in banking and telecommunications as well as adjusting commercial laws and practices to fit Western standards. The republic has made progress toward creating a stable investment climate.
This success has enabled the Czech Republic to become the first post-communist country to receive an investment-grade credit rating by international credit institutions. Successive Czech governments have welcomed [[United States of America|U.S.]] investment, in particular, as a counter-balance to the strong economic influence of Western Europe, especially of their powerful neighbour, [[Germany]]. <!-- Which was not always successful, see the flop with Boeing vs Aero Vodochody. --> Although [[foreign direct investment]] (FDI) runs in uneven cycles, with a 12.9% share of total FDI between 1990 and March 1998, the U.S. was the third-largest foreign investor in the Czech economy, behind Germany and the [[Netherlands]].
The republic boasts a flourishing consumer production sector and has [[privatization|privatized]] most state-owned heavy industries through the [[voucher privatization]] system. Under the system, every citizen was given the opportunity to buy, for a moderate price, a book of vouchers that represents potential shares in any state-owned company. The voucher holders could then invest their vouchers, infusing the chosen company with valuable capital. State ownership of businesses was estimated to be about 97% under [[communism]]. In 1998, more than 80% of enterprises are in private hands. When the voucher privatization process is complete, Czechs will own shares of each of the Czech companies, making them one of the highest per capita share owners in the world. Privatization through restitution of real estate to the former owners was largely completed in 1992.<!-- The voucher privatization is already finished. Some people think it was a flop. Shouldn't it be reflected here? -->
==1995-2000==
The republic's economic transformation is far from complete. A recession in 1998 revealed that the government still faces serious challenges in completing industrial restructuring, increasing [[transparency (humanities)|transparency]] in [[capital market]] transactions, fully [[privatization|privatizing]] the [[banking]] sector, transforming the [[house|housing]] sector, privatizing the [[health care]] system, and solving serious environmental problems.
Political and financial crises in 1997 shattered the Czech Republic's image as one of the most stable and prosperous of post-Communist states. Delays in enterprise restructuring and failure to develop a well-functioning capital market played major roles in Czech economic troubles, which culminated in a currency crisis in May. The currency was forced out of its fluctuation band as investors worried that the current account deficit, which reached nearly 8% of [[Gross domestic product|GDP]] to introduce two [[austerity]] packages later in the spring (called vernacularly "The Packages"), which cut government spending by 2.5% of GDP. Growth dropped to 0.3% in 1997, -2.3% in 1998, and -0.5% in 1999. The basic transition problem continues to be too much direct and indirect government influence on the privatized economy. The government established a restructuring agency in 1999 and launched a revitalization program - to spur the sale of firms to foreign companies. Key priorities include accelerating legislative convergence with [[European Union|EU]] norms, restructuring enterprises, and privatizing banks and utilities. The economy, fuelled by increased export growth and investment, is expected to recover in 2000.
==2000-2005==
Growth in 2000-05 was supported by exports to the EU, primarily to Germany, and a strong recovery of foreign and domestic investment. Domestic demand is playing an ever more important role in underpinning growth as interest rates drop and the availability of credit cards and mortgages increases. Current account deficits of around 5% of GDP are beginning to decline as demand for Czech products in the European Union increases. Inflation is under control. Recent accession to the EU gives further impetus and direction to structural reform. In early 2004 the government passed increases in the Value Added Tax (VAT) and tightened eligibility for social benefits with the intention to bring the public finance gap down to 4% of GDP by 2006, but more difficult pension and healthcare reforms will have to wait until after the next elections. Privatization of the state-owned telecommunications firm [[Český Telecom]] took place in 2005. Intensified restructuring among large enterprises, improvements in the financial sector, and effective use of available EU funds should strengthen output growth.
==Energy==
The Czech Republic is reducing its dependence on highly polluting low-grade [[brown coal]] as a source of energy.. [[Nuclear energy]] presently provides about 30% of total power needs, and its share is projected to increase to 40%. [[Natural gas]] is procured from [[Russia]]n [[Gazprom]] (roughly three-fourths of domestic consumption) and from [[Norway|Norwegian]] companies (most of the remaining one-fourth). Russian gas is imported via Ukraine ([[Druzhba pipeline|Friendship pipeline]]), Norwegian gas is transported through [[Germany]]. The gas consumption (approx. 100 TWh in 2003-5) is almost two times higher than the electricity consumption. South Moravia has a small [[Oil and gas deposits in the Czech Republic|oil and gas deposits]].
==Statistical indicators==
''From the [[CIA World Factbook]] 2006''
'''Household income or consumption by percentage share:''' (1996)
*''lowest 10%:'' 4.3%
*''highest 10%:'' 22.4%
'''Industrial production growth rate:''' 11% (2004)
'''Electricity - production:''' 78.18 GWh (2003)
'''Electricity - production by source:'''
*''fossil fuel:'' 75.54%
*''hydro:'' 2.55%
*''nuclear:'' 20.37%
*''other:'' 1.54% (1998)
'''Electricity - consumption:''' 56.5 GWh (2003)
'''Electricity - exports:''' 26.3 GWh (2003)
'''Electricity - imports:''' 10.1 GWh (2003)
'''Oil - production:''' 12,380 bbl/day (2003)
'''Oil - consumption:''' 185,200 bbl/day (2003 est.)
'''Oil - exports:''' 26,670 bbl/day (2001)
'''Oil - imports:''' 192,300 bbl/day (2001)
'''Oil - proved reserves:''' 17.25 million bbl (1 January 2002)
'''Natural gas - production:''' 133 million m³ (2003 est.)
'''Natural gas - consumption:''' 9.623 billion m³ (2003 est.)
'''Natural gas - exports:''' 1 million m³ (2001 est.)
'''Natural gas - imports:''' 9.521 billion m³ (2001 est.)
'''Natural gas - proved reserves:''' 3.964 billion m³ (1 January 2002)
'''Natural resources:''' coal, timber, lignite, uranium, magnesite.
'''Agriculture - products:'''
wheat, rye, oats, corn, barley, potatoes, sugar beets, hops, fruit; pigs, cattle, poultry, horses; forest products
'''Exports - commodities:'''
machinery and transport equipment 52%, chemicals 5%, raw materials and fuel 9% (2003)
'''Imports - commodities:'''
machinery and transport equipment 46%, raw materials and fuels 15%, chemicals 10% (2003)
'''Exchange rates:'''
koruny (Kč) per US$1 - 18.277 (December 2007) 23.957 (2005), 25.7 (2004), 28.2 (2003), 32.7 (2002), 38.0 (2001), 38.6 (2001), 34.6 (1999), 32.3 (1998), 31.7 (1997), 27.1 (1996), 26.5 (1995)
==See also==
* [[Škoda Works]]
* [[Czech National Bank]]
* [[Prague Stock Exchange]]
* [[Economy of Europe]]
==Resources==
* ''Statistická ročenka České republiky'' (''Statistical Yearbook of the Czech Republic'') by the [[Czech Statistical Office]]. The current line is published annually since 1957. Recent yearbooks can be read [http://www.praha.czso.cz/eng/redakce.nsf/i/statistical_yearbooks_of_the_czech_republic online] (in Czech and English).
* [[Czechoslovakia]] published its first statistical yearbook in 1920. Historically used names: ''Statistická příručka Republiky československé'', ''Statistická ročenka Protektorátu Čechy a Morava'' (during the [[German occupation of Czechoslovakia|occupation]]) and ''Statistická ročenka Československé socialistické republiky''.
* Statistics about the [[Czech lands]] in [[Austria-Hungary]] were collected by ''Zemský statistický úřad Království českého'' (''Provincial Statistical Office of the Czech Kingdom'') founded in 1897. Two detailed books (in Czech and German) were published in 1909 and 1913.
==External links==
*[http://www.oecd.org/eco/surveys/czech/ OECD Economic Survey of the Czech Republic]
*[http://www.oecd.org/czech/ OECD's Czech Republic country Web site]
*[http://www.czech.cz/en/economy-business-science/doing-business/ Doing business in Czech Republic]
*[http://www.czso.cz/eng/csu.nsf/aktualniinformace Current economic data]
*[http://www.czech.cz/en/economy-business-science/general-information/economy-development-and-potential/ Economy: Development and potential]
{{EU countries}}
{{OECD}}
{{Economy of Europe}}
[[Category:Economy of the Czech Republic| ]]
[[Category:European Union member economies]]
[[Category:OECD member economies|Czech Republic]]
[[cs:Ekonomika Česka]]
[[es:Economía de la República Checa]]
[[fr:Économie de la République tchèque]]
[[gl:Economía da República Checa]]
[[hr:Gospodarstvo Češke]]
[[io:Ekonomio di Chekia]]
[[oc:Economia de la Republica Chèca]]
[[pt:Economia da República Checa]]
[[ru:Экономика Чехии]]
[[vi:Kinh tế Cộng hòa Séc]]