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The Czech inflation rate slowed down from 2.5 percent in May to 1.2 percent in June, the lowest figure since September 1999. In a month-on-month comparison, consumer prices fell by 0.3 percent in June, which was the fourth consecutive monthly decrease. Both the monthly and annual slowdown of inflation was caused mainly by the strong crown as well as a fall in prices of foodstuffs, non-alcoholic beverages and fuel.

The Czech republic is expected to join the European Union in 2004 in a group of ten Central and East European countries. The issue of EU enlargement is quickly becoming the most pressing for companies doing business in the region. Recently, the Economist Corporate Network which is part of The Economist Group, in cooperation with business advisor Ernst & Young published a report assessing the business implications of EU enlargement.

European Union leaders chose to side-step tough decisions on costly farm subsidies at last Saturday's Seville Summit, but set a November deadline for resolving the issue, seen as crucial if the planned expansion of the EU to the east is to go ahead in 2004.

Ukraine's Interfax news agency reported on Wednesday that the Czech government was considering taking delivery of military cargo aircraft built jointly by Russia and Ukraine, as part of Russia's debt repayment scheme.

And the governor of the Czech National Bank said in Brussels this week that his country must choose between two strategies of adopting the euro within a year.

The Trade and Industry Minister Miroslav Gregr has accused the government's privatisation bureau - the National Property Fund - of boycotting the sale of state-held stakes in eight regional distributors to the power utility CEZ.