Czech Republic: Country and Foreign Investment
Economy and Currency
This page was last updated on 7 September 2019.
The Czech economy has been expanding since 2014. During this time, the highest annual GDP growth rate was 5.8% in 2015, which is very healthy for a maturing economy. GDP per capita at purchasing power parity has also been rising steadily and was at US$33,414 in 2018.
The government debt to GDP ratio, which peaked at a fairly low 44.9% in 2013, has been reduced to 32.7% in 2018. Inflation did rise from a negligible level in late 2016, and has hovered around 2% to 3% since then.
The labour force is just under 5.3 million and is highly skilled. The unemployment rate, which had fluctuated between 6% and 9% in the wake of the global recession, has been falling since 2014 and stood at a much more acceptable 2.7% in July 2019.
Not surprisingly, neighbouring economic giant Germany is the Czech Republic’s biggest import and export partner. Principal industries include metallurgy and vehicle, machinery and equipment manufacture. As in all developed economies, service industries contribute the most to GDP (59%), though industry is very important (as it has been for more than a century), contributing 38% and agriculture 3%.
The Czech Republic joined the European Union in 2004. There is political resistance to adopting the euro as its currency and it seems unlikely that this will occur within the next decade. The official currency remains the Czech koruna (‘crown’).