Macroeconomic Forecast Czech Republic

Unemployment in the Czech Republic held steady in August, coming in at 8.2%. We forecast the joblessness rate to fall marginally to 8.0% this year and 7.0% in 2012, from 9.6% recorded in 2010, as the economy continues to recover from the global economic crisis and as the severity of fiscal austerity measures eases somewhat going into 2012. However, we caution that risks to this forecast are firmly to the downside as uncertainty surrounding the eurozone debt crisis and mixed data coming out of the US threatens to undermine the Czech Republic's export-led economic recovery.

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