Czech economy in 2000: a turn toward growth

The authors present an analysis of the most recent trends in the Czech economy. They claim that the economy is going through a turning point in its development: after two years of a decline, the economy is likely to grow again in 2000. The growth will be driven mainly by exports, followed by private household consumption. The authors expect that Czech exports will be positively influenced by an accelerating growth in the EU, but not to such an extent to compensate fully for the increase of Czech domestic demand. The imbalance of the current account will be covered with the record inflow of foreign direct investment in 2000. The authors also analyse the recent monetary policy and predict the development of inflation in the Czech Republic. They expect inflation to accelerate slightly again in 2000, but the Central Bank is still likely to undershoot its target for 2000.

Keywords: monetary policy, Czech Economy, economic growth, public sector