CZECH REPUBLIC
A small proud nation with a good sense of humour, highly educated labour force, and track record of invention (from propeller to contact lenses) and high quality products (cars, beer, glass)
Total area: 78,864 sq km (comparable to Rep. of Ireland)
Population: 10.3 million
Government type: Parliamentary democracy
Administrative division: 14 administrative regions
Capital + other major cities: Prague (1.3 million) + Brno (380,000), Ostrava (320,000)
Currency: Czech Crown (koruna, CZK)
Languages: Czech (official)
Ethnicity: Czech (90.4%), Moravian (3.7%), Slovak (1.9%), other (4%)
Religion: Rom. Catholic 26.8%, Protestant 2.1%, other 3.3%, unspecified 8.8%, unaffiliated 59%
President: (Mr.) Vaclav Klaus (since 7 March 2003)
Prime Minister: (Mr.) Petr Necas (since 28 June 2010)
Date of EU accession: 1 May 2004 |
 |
MACROECONOMIC OVERVIEW
The Czech Republic is today considered one of the most stable and prospering countries of Central and Eastern Europe (CEE). Since 1989, it has accomplished a profound transition toward a market driven economy including privatization and restructuring of all its industry and service sectors. Only a handful of companies remain in state ownership, including some utilities, national airlines, post, and a few others. The country has attracted impressive volumes of foreign direct investments and its beautiful capital of Prague has been a most popular destination for millions of tourists every year.
In 2009, after enjoying 10 consecutive years of growth (GDP growth peaked at 6.8% in 2006) strongly driven by exports and FDI inflows, the Czech Republic's economy shrank by 4.1% - experiencing the worst year in its history in terms of economic performance.
Although the Czech Republic was free of the problems that stood at the start of the crisis (its banking system was healthy and consumer and public debts at moderate levels), an economic decline resulted from its strong export orientation, which makes the country susceptible to reduced demand in West European and global markets.
In 2010, its economy returned on a path of growth (2.4% and 2.3% GDP growth in 2010 and 2011 respectively) due to recovery in the EU markets, especially in Germany. Domestic consumer demand remains under pressure due to increased unemployment and low wage growth.
Selected economic indicators, Czech Republic, 2005 – 2011
| |
|
2005 |
2006 |
2007 |
2008 |
2009 |
2010 |
2011 |
| GDP |
|
|
|
|
|
|
|
|
| Real GDP growth |
% |
6.3 |
6.8 |
6.0 |
2.5 |
-4.1 |
2.4 |
2.3 |
| GDP at current prices |
€ bn |
100.20 |
113.48 |
127.16 |
147.88 |
137.16 |
146.26 |
155.89 |
| Foreign trade |
|
|
|
|
|
|
|
|
| Exports |
€ bn |
72.23 |
86.77 |
101.80 |
114.00 |
94.84 |
110.12 |
|
| Imports |
€ bn |
68.97 |
82.82 |
95.43 |
107.27 |
87.21 |
103.08 |
|
| Balance |
€ bn |
3.26 |
3.95 |
6.38 |
7.69 |
|
|
|
| Prices |
|
|
|
|
|
|
|
|
| CPI - average inflation rate |
% |
1.9 |
2.5 |
2.8 |
6.3 |
0.6 |
1.2 |
|
| PPI – industry - average |
% |
3.1 |
1.6 |
4.1 |
|
|
|
|
| Employment |
|
|
|
|
|
|
|
|
| Registered unemployment |
% |
8.97 |
8.13 |
6.62 |
4.4 |
6.7 |
|
|
| Average monthly gross wage |
€ |
638 |
713 |
781 |
938 |
|
|
|
| Exchange rates |
|
|
|
|
|
|
|
|
| CZK/USD average |
|
23.95 |
22.61 |
20.31 |
17.06 |
19.06 |
19.11 |
|
| CZK/EUR average |
|
29.78 |
28.34 |
27.76 |
24.94 |
26.44 |
25.23 |
|
Source: Eurostat and Czech National Bank, 2011; data for 2011 - forecast
STRUCTURE OF ECONOMY - KEY SECTORS
 |
 |
| Source: CIA, The World Factbook, 2009 |
Source: Czech Statistical Bureau, 2007 |
Manufacturing: The Czech Republic has a long tradition in manufacturing, and the last fifteen years have brought considerable growth, strongly supported by unprecedented levels of foreign direct investment, to many of its industry sectors, including the following:
- Automotive sector – besides its traditional carmaker Skoda (part of VW), the Czech Republic also hosts brand new plants of TPCA (Toyota/Peugeot/Citroen) and Hyundai. The industry also includes close to 200 component suppliers, of which most are foreign owned – via acquisitions and green-field & brown-field investments.
- Electronics and electric products is another sector with a long tradition, currently ranging from manufacture of components to consumer electronics to avionic radars.
- Plastics industry is tightly connected to the automotive and electronics sectors, and as such benefited from their boom in the last few years.
- Precision engineering – another sector in which the Czech Republic has an excellent reputation, and many of the world’s leading companies source from here.
Financial services: The country has a modern competitive banking sector, now fully in the hands of leading international banks such as KBC, Societe Generale, Erste Bank or UniCredit Group. During the turmoil on the world financial markets, the local banks financed their loans from the deposits of Czech savers; the loan-to-deposit ratio of the Czech banking sector, currently standing at 77%, belongs amongst the lowest in the EU.
Shared services and R&D/technology centres: The country is well advanced on its way to become the regional hub for customer services, software development, R&D, design, and business support services. It has been widely recognized by multinational corporations as a primary location for regional expansion as well as for setting up their regional headquarters.
Biotechnology and Life Sciences: Ongoing biotech research includes genome structure, molecular genetics, nucleus function and structure, molecular immunology as well as treatment of hepatitis B and AIDS.
Tourism: The Czech Republic is considered as one of the most favourite destinations for tourists due to its historical heritage, spas and resorts as well as mountains. Twelve historical monuments are on the UNESCO heritage list. There are over 200 castles and chateaus, more than 40 protected historical towns, and 36 spa towns. Its capital Prague is the country’s main attraction.
EasyLink provides professional expertise in strategic market research, market intelligence, competitive intelligence, market size analysis and market potential evaluation, competitive landscape and distribution structure study, identification of new customers and potential partners etc. Please contact us to discuss how we can assist your business objectives in export, marketing or sourcing.
We are experienced experts in matchmaking projects involving the search, identification, screening and pre-selection of business partners in Central & Eastern Europe, ranging from distributor search to profiling of prospective customers and identifying specific business opportunities; we assist our clients with sourcing in emerging markets and low-cost markets in the CEE region.
EasyLink has a unique track record in international trade promotion. With local consultants in all key markets in Central & Eastern Europe, EU markets and some overseas markets, we provide customized market research, develop trade opportunities with prospective partners and new customers, and assist clients with strategic advice for their export, marketing and sourcing needs.
MARKETS 