Czech Republic economy lowers inflation target
 
The decision taken by the Czech National Bank (CNB) to lower the country's inflation target from three to two per cent beginning in 2010 was based on the strength and maturity of its economy, one official has claimed.
 
Popular with investors and tourists, the Czech Republic has seen significant changes over the course of the last 20 years, according to Mojmir Hampl, a member of the CND board, who argued that the country is unlikely to experience any further "structural changes", reports Czech Business Weekly.
 
Defending the CND's decision to lower inflation targets, Mr Hampl said that the country's aims were "credible" and achievable, while also helping the country to meet the Maastricht criteria necessary to join the European single currency.
 
"We have low inflation anyway, so it won't harm the economy to adjust to a lower target," he told the newspaper.
 
"Inflation expectations are consistently low and anchored in the Czech economy."
 
The country's foreign ministry recently stated that the republic is expected to adopt the euro – which may be of benefit to foreign property investors – in 2012, following approval from a national coordination group.
 
Speaking to the Prague Daily Monitor, Ales Michl, analyst at Raiffeisenbank, recently said that the country was well-positioned to meet the Maastricht criteria, although other EU states' "reluctance" to admit new members to the single currency may prove to be a barrier.
 
Mr Hampl said that, although the specific aim of the CND was not to lower the inflation target in order to meet the criteria, it is likely to be a "sweet side effect".