Macroeconomic Forecast Czech Republic

With Q210 real GDP growth coming in at a better- than-expected 3.0% y-o-y, we have revised up our 2010 real GDP growth forecast for the Czech Republic to 2.7% from 2.2% previously. However, while Q210 impressed, we nevertheless believe that the domestic economy will slow in early 2011 due to slowing demand growth for Czech exports and the coalition government's implementation of fiscal austerity. Therefore we forecast the Czech Republic's 2011 real GDP growth at an unremarkable 2.3%.

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