Czech economic growth will remain high this year -- experts.

(From Czech News Agency)

PRAGUE, Jan 1 (CTK) - Czech economic growth should remain fast and slow down only negligibly to below five percent this year, wage growth will be higher than inflation, the number of unemployed should decrease and investment will be doing well, economists polled by CTK have said.

Czech households will spend more money, but so will the government owing to elections, the analysts said.

Gross domestic product (GDP) growth should slow down from 4.9 to 4.6 percent this year, Komercni banka economist Jan Vejmelek said. Increasing household consumption and investment by firms should partly take over the reins of the economy from foreign trade, he added.

Investment will be boosted by a further inflow of money from foreign companies but also by European Union funds. Households will be able to afford to spend more thanks to an increase in wages and pensions, lower taxes, various financial bonuses from politicians before elections and better situation on the labour market.

Price growth in 2006 will accelerate from two percent to almost three percent, that is, roughly half of the pace of wage growth. Regulated prices of electricity, gas, heat and water and sewage fees will increase. Food prices should remain unchanged or increase only negligibly, while the development in fuel prices is still unclear.

While politicians promise a decline in unemployment rate to seven percent, experts are predicting a lower decline or stagnation. In November 2005, unemployment in the Czech Republic reached 8.4 percent.