A modest economic recovery
Overview:
Economic indicators show that the Czech economy has exited recession, recording positive economic growth in Q1 2010. The turnaround is likely to be relatively weak, however, mirroring that in the EU which is the Czech Republic’s (CR) major export market. The recovery is likely to be well balanced, though, with inflation staying low and the current account deficit contained. The key challenge for the government that is formed after parliamentary elections next week will be to reduce the fiscal deficit. This has increased sharply during the global economic crisis and needs to be brought down to a more sustainable level without undercutting the economic recovery. The CSSD is likely to win the most seats in the election but fall well short of a majority. As many as seven parties may win seats in parliament.