Czech Republic » Outlook

International Property Brokers forecast that the real annual GDP growth will be 5.4% in 2006-07 because of the increasing domestic demand. And it will play a vital role in the expansion of the economy. We also expect that the inflation will slightly increase in 2006 and will fall back in 2007.

The ruling Czech Social Democratic Party (CSSD) will stay in authority, together with its two junior associates, until the next parliamentary election, due in June 2006. At present, the opposition centre-right Civic Democratic Party (ODS) is leading in the outlook polls.

The Czech National Bank (CNB, the central bank) kept interest rates constant at its April meeting. We expect the CNB to hold-up raising rates until later in the year, unless inflationary pressures initiate to build.