Czech Republic: 2008 Article IV Consultation: Staff Report; Staff Statement; Public Information Notice on the Executive Board Discussion; and Statement by the Executive Director for Czech Republic
IMF Staff Country Reports, April 14, 2009
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- Czech Republic: 2008 Article IV Consultation: Staff Report; Staff Statement; Public Information Notice on the Executive Board Discussion; and Statement by the Executive Director for Czech Republic
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Bibliographic details
- Published: April 14, 2009
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9781451810288.002
Overview
- Growth in the Czech Republic is projected to slow sharply in 2009 amid a gathering recession abroad and tightening credit at home.
- The 2008 Article IV Consultation highlights that shrinking demand from the euro area, especially Germany, will curtail exports and direct investment inflows.
- Executive Directors praised the generally strong fundamentals that have helped the Czech economy weather the initial spillover effects of the global financial crisis relatively well.
- Directors supported the Czech National Bank’s recent decisions to cut the policy interest rate.
External demand and capital flows
- Shrinking demand from the euro area, with particular emphasis on Germany, is identified as a primary driver of the projected slowdown in 2009.
- Expected impacts include curtailed exports and reduced direct investment inflows.
Domestic financial conditions
- Tightening credit at home is noted as a contributing factor to the sharp slowdown projected for 2009.
- The Czech National Bank’s recent policy interest rate cuts received support from Executive Directors.
Policy assessment and implications
- Strength of fundamentals: Executive Directors judged that generally strong fundamentals mitigated initial spillovers from the global financial crisis.
- Monetary policy: Directors supported the Czech National Bank’s recent decisions to cut the policy interest rate as a response to deteriorating external conditions and domestic credit tightening.
Key terms and subjects covered
- Balance of payments, Banking, Credit, Current account balance, External debt, Inflation, Money, Prices, Public debt.
- Keywords included: CR, Credit, Current account balance, Czech authorities, deficit, economy, Europe, exchange rate criterion, fund staff estimate, Global, Inflation, ISCR, staff appraisal, staff Proj, staff Proj.
Czech Republic: 2008 Article IV Consultation: Staff Report; Staff Statement; Public Information Notice on the Executive Board Discussion; and Statement by the Executive Director for Czech Republic