Political and economic position in 2004
+ Czech Republic is an EU member
+ Economic situation gets under way
+ Inflation higher than in the previous year, but in the green area
+ Gaping hole in the budget; however, fiscal reform was introduced
+ National debt still at rather low level; however, rises rapidly
– Government crisis impairs reform tempo
– Unemployment on record height

Prognosis in 2005
+ Economical catching process continues with considerable growth rates of the GDP
– Government on weak legs; preferred new elections not impossibly; reform tempo much slower

Economic relations to Germany
+ Germany by far the most important trading partner of Czech Republic
+ Czech Republic of the most important trading partners of Germany in CEE
+ Germany the most second-important country of origin of foreign direct investment in Czech Republic
– German trade balance negatively

State: July, 2004
Source: IKB Deutsche Industriebank