Czech Republic - Economy

Economy

The Czech Republic possesses a developed, high-income economy with a GDP per capita of 80% of the European Union average. One of the most stable and prosperous of the post-Communist states, the Czech Republic saw growth of over 6% annually in the three years before the outbreak of the recent global economic crisis. Growth has been led by exports to the European Union, especially Germany, and foreign investment, while domestic demand is reviving.

Most of the economy has been privatised, including the banks and telecommunications. The current centre-right government plans to continue with privatisation, including the energy industry and the Prague airport. It has recently agreed to the sale of a 7% stake in the energy producer, CEZ Group, with the sale of the Budějovický Budvar brewery also mooted. A 2009 survey in cooperation with the Czech Economic Association found that the majority of Czech economists favor continued liberalization in most sectors of the economy.

The country is part of the Schengen Area from 1 May 2004, having abolished border controls, completely opening its borders with all of its neighbours, Germany, Austria, Poland and Slovakia, on 21 December 2007. The Czech Republic became a member of the World Trade Organisation.

The last Czech government led by social democrats had expressed a desire to adopt the euro in 2010, but the current centre-right government suspended that plan in 2007. An exact date has not been set up, but the Finance Ministry described adoption by 2012 as realistic, if public finance reform passes. However, the most recent draft of the euro adoption plan omits giving any date. Although the country is economically better positioned than other EU Members to adopt the euro, the change is not expected before 2019, due to political reluctance on the matter.

The Programme for International Student Assessment, coordinated by the OECD, currently ranks the Czech education system as the 15th best in the world, higher than the OECD average.

The Czech Republic is ranked 30th in the 2012 Index of Economic Freedom.

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