Prague

Economy

The monetary denomination of the Czech Republic is the Koruna (Kc), which has an exchange rate of about 30.5 Kc to one U.S. dollar, remaining fairly stable since its inception. The city of Prague has a well-diversified, highly industrial economy. Main products are metals and machinery, aircraft engines, automobiles (Volkswagen AG), diesel engines, machine tools, refined oil products, electronics, beer, chemicals, and food. During the communist era, Prague and the surrounding countryside produced approximately 80% of the products it consumed, but recently there has been a boom in the newly privatized service sector as the country strives for free-market, democratic practice. Unemployment holds steady at about three percent, and inflation continues to level out through excellent economic planning, but the gross domestic product (GDP) per capita is still below most other industrialized countries, at a purchasing power parity of about $10,000. The collapse of the Russian economy negatively affected the banking system and caused a short recession in 1999, driving away investors. However, eventual entrance to the European Union is expected to balance out the effects. The city still depends on Russia for its oil and gas, but officials are looking for alternatives, such as solar power, nuclear plants, and new sources of oil and gas.