Sharp decrease in foreign investment

The first half of 2008 has seen a sharp fall in foreign investment into the Czech Republic, according to Czech Invest, the government agency which promotes this cause. According to Czech Invest, the country received 124 investments in the period between January and June totalling around 20 billion crowns. This figure is 29 billion crowns lower than in the same period in 2007 and represents a serious decline and challenge for the Czech Republic. Other seismic shifts have also been evident – last year 98 percent of investments were in manufacturing projects, this year’s figures indicate that 65 percent of investments are in research, development and services. The change in investment dynamics has been explained as a shift from large-scale projects to smaller more targeted projects and is viewed as somewhat positive in the sense that the Czech Republic appears to be moving towards its desired goal of becoming a so-called knowledge-based economy rather than a manufacturing base.

Author: Dominik Jůn