Boston, MA -- (SBWIRE) -- 10/20/2014 -- Core Views

- We have revised down our forecast for inflation in the Czech Republic, and readjusted our expectation for monetary policy trajectory. We now expect the Czech National Bank to target a weaker koruna in the coming months, as deflationary risks mount and ECB easing looms over the horizon.

- The ongoing debate in the Czech Republic over civil service reform will result in only modest modifications to the status quo by end-2014. This will darken public perceptions of the government's ability and willingness to address structural deficiencies of the state administration.

- We reiterate our view that the country will continue to post modest current account deficits for the foreseeable future. The country's status as a regional safe haven will ensure that stable financial inflows continue to cover the country's external financing needs.

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Major Forecast Changes

- Following the Czech Statistical Office's latest revision of the Q114 real GDP growth print, we have revised upward our forecast to 2.4% from 1.8% previously. Nevertheless, we reiterate our expectation for the momentum behind the export-led recovery in the Czech Republic will abate somewhat in H214, on the back of a slowdown in German export growth.

Risks To Outlook

- A more pronounced slowdown in eurozone economic growth and in particular in Germany would have a negative effect on the Czech Republic's economic growth trajectory. Owing to the high degree of trade integration with Germany, the Czech Republic's economic recovery remains highly dependent on external demand remaining relatively receptive to Czech exports.

The Czech Republic Business Forecast Report helps businesses with market assessment, strategic planning and decision making to promote growth and profitability in Czech Republic and is an essential tool for CEOs, Chairmen, Finance Directors/CFOs, Managing Directors, Marketing/Sales Directors with commercial interests in this emerging market.

An influential new analysis of Czech Republic's economic, political and financial prospects through end-2018, just published by award-winning forecasters, Business Monitor International (BMI).

Key Uses:

- Forecast the pace and stability of Czech Republic's economic and industry growth through end-2018.

- Identify and evaluate adverse political and economic trends, to facilitate risk mitigation.

- Assess the critical shortcomings of the business environment that pose hidden barriers and costs to corporate profitability.

- Contextualise Czech Republic's country risks against regional peers using BMI's country comparative Risk Rankings system.

- Evaluate external threats to doing business in Czech Republic, including currency volatility, the commodity price boom and protectionist policies.

The Czech Republic Business Forecast Report by Business Monitor International (BMI) includes four major sections: Economic Outlook, Political Outlook, Business Environment and Key Sector Outlook.

Economic Outlook:

How will the Czech Republic economic policy-making and performance impact on corporate profitability over 2014-2018?

BMI provides our fully independent 5-year forecasts for Czech Republic through end-2018 for more than 50 economic and key industry indicators. We evaluate growth, and also forecast the impact of economic management.

Economic Outlook Contents

The Czech Republic Business Forecast Report features BMI's forecasts with supporting analysis for 2014 through to end-2018, set against government views and BMI's evaluation of global and regional prospects.

Key Areas Covered:

Data:

- Full 10-year forecasts with data - for key macroeconomic variables including GDP (real growth and per capita), population, inflation, current account balance and the exchange rate.

- BMI's comprehensive Risk Rankings system - rates each country worldwide for economic and political risk, and rates the business environment, within a global and regional context.

Written Analysis:

- Economic Activity - real GDP growth, employment, inflation, consumption (retail sales and confidence).

- Balance of Payments - trade and investment, current and capital account.

- Monetary Policy - interest rate trends (bank lending and deposit rates) and inflation (producer price and consumer price).

- Exchange Rate Policy - currency controls, foreign investment flows, exchange rates and foreign exchange reserves.

- Fiscal Policy - macroeconomic strategy and policies, government finance and tax reforms.

- Foreign Direct Investment - approvals, inflows and climate.

- External Debt - debt profile (short and long-term plus public and private sector exposure).
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