IMF Staff Country Reports

This paper describes economic developments in the Czech Republic during 1990–95. In 1991–93, quick progress was made in containing inflation, rebuilding foreign reserves, and restoring confidence in economic policies; and this was followed by resumption of growth in 1994. Financial and political stability and continued progress toward a market economy attracted large capital inflows in 1993–95. In spite of attempts to sterilize these inflows, monetary growth was rapid and fueled a boom in domestic demand, which in turn widened the current account deficit and maintained inflation at relatively high levels.