Czechoslovakia: Falling exports, failing economy.

Among the faster growing economies in Europe, this ex-Soviet bloc member is heavily dependent on exports to keep its economy ticking. According to official estimates, 60% of the country’s GDP is contributed by exports.

Western Europe is the major market for Czech exports. Glass products, beers, trams, cars, machinery, wooden toys, etc., are among the major exports that fill the Czech coffers. Among the major import items are mineral fuels, lubricants, oil, gas, etc. Having enjoyed a steady growth with the help of a robust export market, Czechoslovakia is now experiencing a downturn on account of the all round recession, leading to falling demand for its products in spite of their high quality.

Falling demand for Czech products overseas has led to increased unemployment, that now stands at around 8.50%. Worse is in store on this count in 2011. Not only are employment opportunities going to be scarce, even the wages are expected to fall in real terms. The economy is expected to grow 2.50% in 2010 and about 3.40% in 2011. Inflation though, is expected to be under control posing little problem. These are some of the findings of the country’s Finance Ministry survey conducted recently.

This Central European country that was earlier an important member of the Soviet bloc, is now an important member of the European Union, contributing handsomely to the overall economic development in the region. With Europe slowly getting out of the recession, with France and Germany leading the way, the Czech economy is expected to look up and start performing once again. However, it is anyone’s guess as to when exactly there is going to be real growth as against just a fall in the negative numbers.