One of the most stable and prosperous of the post-Communist states, the Czech Republic has been recovering from recession since mid-1999. Growth in 2000-2001 was led by exports to the European Union, especially Germany, and foreign investment, while domestic demand is reviving. The rate of corruption remains one of the highest among OECD countries.

Uncomfortably high fiscal and current account deficits could be future problems.

Moves to complete banking, telecommunications, and energy privatization will add to foreign investment, while intensified restructuring among large enterprises and banks and improvements in the financial sector should strengthen output growth.

The Czech government has expressed a desire to adopt the euro currency in 2010, but its introduction is only in the early planning stages and there are growing doubts whether budget deficit will not force postponement.

Tourism
The Czech economy gets a substantial income from tourism: in 2001, the total earnings from tourism reached 118.13 billion CZK, making up 5.5 % of GNP and 9.3 % of overall export earnings. The industry employs more than 110,000 persons - over 2% of the population.

There are several centers of tourist activity: The historic city of Prague is the primary tourist attraction, and the city is also the most common point of entry for tourists visiting other parts of the country. Most other cities in the country attract significant numbers of tourists, but the spa towns such as Karlovy Vary and Mariánské Lázně are particularly popular holiday destinations. Other popular tourist sites are the many castles and chateaux, such as those at Karlštejn, Pernštejn and Český Krumlov. Away from the towns, areas as Český Ráj, Šumava and the Krkonoše mountains attract visitors seeking outdoor pursuits.

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