Czech Republic sees GDP growing 3.8 percent

Oct. 26, 2004 at 10:11 AM

PRAGUE, Czech Republic, Oct. 26 (UPI) -- The Czech Finance Ministry said Tuesday it expected economic growth in 2004 to be 3.8 percent, falling to 3.6 percent in 2005.

The new figures reflect increased optimism about the development of the Czech economy which grew 4.1 percent year-on-year in the second quarter of this year. The finance ministry's previous forecast for 2004 economic growth was 3.1 percent. For 2005 it had expected growth of 3.2 percent.

The finance ministry also said it expected average inflation this year of 2.9 percent, rising to 3.3 percent in 2005. Expectations of a pick up in inflation have led the central bank to warn markets about the possibility of increased interest rates.

Unemployment is expected to be 10.3 percent in both 2004 and 2005, according to the finance ministry's latest calculations.

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