The Czech Republic: Economy

The World Factbook 1993: Czech Republic Economy

Overview: The dissolution of Czechoslovakia into two independent nation states - the Czech Republic and Slovakia - on 1 January 1993 has complicated the task of moving toward a more open and decentralized economy. The old Czechoslovakia, even though highly industrialized by East European standards, suffered from an aging capital plant, lagging technology, and a deficiency in energy and many raw materials. In January 1991, approximately one year after the end of communist control of Eastern Europe, theCzech and Slovak Federal Republic launched a sweeping program to convert its almost entirely state-owned and controlled economy to a market system. In 1991-92 these measures resulted in privatization of some medium- and small-scale economic activity and the setting of more than 90% of prices by the market - but at a cost in inflation, unemployment, and lower output. For Czechoslovakia as a whole inflation in 1991 was roughly 50% and output fell 15%. In 1992, in the Czech lands, inflation dropped to an estimated 12.5% and GDP was down a more moderate 5%. For 1993 the government of the Czech Republic anticipates inflation of 15-20% and a rise in unemployment to perhaps 12% as some large-scale enterprises go into bankruptcy; GDP may drop as much as 3%, mainly because of the disruption of trade links with Slovakia. Although the governments of the Czech Republic and Slovakia had envisaged retaining the koruna as a common currency, at least in the short term, the two countries ended the currency union in February 1993.

National product: GDP - purchasing power equivalent - $75.3 billion (1992 est.)

National product real growth rate: -5% (1992 est.)

National product per capita: $7,300 (1992 est.)

Inflation rate (consumer prices): 12.5% (1992 est.)

Unemployment rate: 3.1% (1992 est.)

Budget: revenues $NA; expenditures $NA, including capital expenditures of $NA

Exports: $8.2 billion (f.o.b., 1992) commodities: manufactured goods, machinery and transport equipment, chemicals, fuels, minerals, and metals partners: Slovakia, Germany, Poland, Austria, Hungary, Italy, France, US, UK, CIS republics Imports: $8.9 billion (f.o.b., 1992) commodities: machinery and transport equipment, fuels and lubricants, manfactured goods, raw materials, chemicals, agricultural products partners: Slovakia, CIS republics, Germany Austria, Poland, Switzerland, Hungary, UK, Italy

External debt: $3.8 billion hard currency indebtedness (December 1992)

Industrial production: growth rate -4% (November 1992 over November 1991); accounts for over 60% of GDP

Electricity: 16,500,000 kW capacity; 62,200 million kWh produced, 6,030 kWh per capita (1992)

Industries: fuels, ferrous metallurgy, machinery and equipment, coal, motor vehicles, glass, armaments

Agriculture: largely self-sufficient in food production; diversified crop and livestock production, including grains, potatoes, sugar beets, hops, fruit, hogs, cattle, and poultry; exporter of forest products

Illicit drugs: the former Czechoslovakia was a transshipment point for Southwest Asian heroin and was emerging as a transshipment point for Latin American cocaine (1992)

Economic aid: the former Czechoslovakia was a donor - $4.2 billion in bilateral aid to non-Communist less developed countries (1954-89)

Currency: 1 koruna (Kc)=100 haleru

Exchange rates: koruny (Kcs) per US$1 - 28.59 (December 1992), 28.26 (1992), 29.53 (1991), 17.95 (1990), 15.05 (1989), 14.36 (1988), 13.69 (1987)

Fiscal year: calendar year