Prague Economic Papers 1997, 6(2) | DOI: 10.18267/j.pep.123

Czech economy at the beginning of 1997

Kamil Janáček, Martin Čihák, Marie Frýdmanová, Tomáš Holub, Eva Zamrazilová

Czech GDP growth in 1996 failed to reach the rates expected by most domestic and foreign experts and institutions. Compared to initial forecasts which ranged between 5.0 and 5.5 %, the actual growth of real GDP fell short by roughly 1 percentage point: we expect the final GDP growth figure to be within 4.1 - 4.4 %. Private consumption and fixed investment were the main factors of GDP growth in 1996. A gap persisted between domestic supply and domestic demand; the gap tended to be relatively stable and was covered by a fast increase of imports of goods and services.
The slowdown of GDP growth was caused by several factors, prominent among them are: a sizeable slowdown of export; lack of ability to launch a more dynamic export effort; nominal appreciation of the Czech currency against both the DEM and the USD; a decelerating effect of the measures taken by the Czech National Bank in mid 1996, when monetary policy turned from neutral to restrictive.

Published: January 1, 1997  Show citation