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3. THE MOST APPROPRIATE MARKETS FOR BUSINESS
According to Ernst and Young (2004), the three most appropriate markets for business in the CEE are Poland, the Czech Republic, Hungary but also Slovakia and Slovenia because of their political and economic stability (in comparison to others CEE countries). In regards to Slovenia and Slovakia, investment there may be not the best strategic solution due to their small consumer market, so will focus on Czech Republic, Poland, and Hungary' present situation.
3.1. CZECH REPUBLIC
Economic situation for 2004:
"Following entry into the EU in 2004 the main concern for the Czech Republic is to strengthen growth prospects" (www.oecd.org)
The Czechs are enjoying nearly 4% of growth in their GDP in 2004, indicating an increase in demand for their produce.
"??.. one of the most stable and prosperous of the post communist state of the CEE" (www.cia.gov)
The Czechs have stabilized their inflation rate in recent years, according to (www.europa.eu.int), and hoping to maintain it at that level. Investments in the Czech Republic are expanding rapidly and exports are on the up.
However the government is facing problems of high deficits because of their increase in spending in recent year. This is causing them to fund their spending through higher taxes. The Czechs economic transformation is not yet complete. Therefore there are many challenges faced by the government involving industrial restructuring, transforming housing sector and also reforming of pensions and the health care system. (CIA, 2005)
Business opportunity:
The size of the potential domestic market in the Czech Rep ...