Diplomatic representation from the US:
chief of mission: Ambassador John SHATTUCK
embassy: Trziste 15, 11801 Prague 1
mailing address: use embassy street address
Flag description: two equal horizontal bands of white (top) and red with a blue isosceles triangle based on the hoist side (almost identical to the flag of the former Czechoslovakia)
Economy
Economy—overview: Political and financial crises in 1997 shattered the Czech Republic's image as one of the most stable and prosperous of post-Communist states. Delays in enterprise restructuring and failure to develop a well-functioning capital market played major roles in Czech economic troubles, which culminated in a currency crisis in May. The currency was forced out of its fluctuation band as investors worried that the current account deficit, which reached nearly 8% of GDP in 1996, would become unsustainable. After expending $3 billion in vain to support the currency, the central bank let it float. The growing current account imbalance reflected a surge in domestic demand and poor export performance, as wage increases outpaced productivity. The government was forced to introduce two austerity packages later in the spring which cut government spending by 2.5% of GDP. A tough 1998 budget continued the painful medicine. These problems were compounded in the summer of 1997 by unprecedented flooding which inundated much of the eastern part of the country. Czech difficulties contrast with earlier achievements of strong GDP growth, a balanced budget, and inflation and unemployment that were among the lowest in the region. The Czech economy's transition problems continue to be too much direct and indirect government influence on the privatized economy, the sometimes ineffective management of privatized firms, and a shortage of experienced financial analysts for the banking system. The country slipped into a mild recession in 1998, but hopes to rebound with 1% growth in 1999.
GDP: purchasing power parity—$116.7 billion (1998 est.)
GDP—real growth rate: -1.5% (1998 est.)
GDP—per capita: purchasing power parity?$11,300 (1998 est.)
GDP—composition by sector: agriculture: 5% industry: 33.8% services: 61.2% (1996)
Population below poverty line: NA%
Household income or consumption by percentage share: lowest 10%: 4.6% highest 10%: 23.5% (1993)