The Czech Republic's strong economic growth could provide the key to encouraging further reform, claims a new report from the European commission.

Recent analysis by the commission on the Czech Republic's attempts to encourage infrastructure growth and boost job creation concluded that strong economic performance could provide a vital stepping stone to ensuring further improvements and reform within the country.

In particular, the Czech Republic has shown a commitment to microeconomics and has made progress in boosting research and development projects over the past 12 months. There has also been significant reform within the business environment, especially concerning the enforcement of regulation to ensure transparency.

The commission now recommends that the Czech government should focus on encouraging greater flexibility in the region's job market as well as developing workable links between foreign-owned and domestic companies to help stimulate overseas investment and provide further employment opportunities.

Since joining the European Union in 2004, the country has seen a sharp improvement in economic circumstances and could quickly develop into an ideal market for overseas property investors, with more attractive real estate prices than the UK housing market.

Reforms within the banking sector have boosted the provision of local mortgage products that offer very favourable interest rates as well as ensuring there is a strong domestic demand for high-quality housing. In particular, the capital city of Prague is benefiting from a profitable tourism boom, especially within the city break sector, as the number of low-cost airlines serving the region increases.