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The Czech government approved cuts the proposed 2003 state budget deficit by a third, and made flood relief the top priority. The Czech trade balance worsened in September. The Netherlands removed its objection to the Czech Republics closing of the economic chapter in EU accession negotiations. While one of the country's mobile operators is facing serious financial problems, another one is considering expansion worldwide.

The Czech Republics unique mix of a cheap and highly skilled labor force has led to the development of a progressive and highly developed information technology industry. In many ways the Czech Republic is increasingly being considered the silicon valley of the East. In this weeks economics report we look at how these Czech IT firms are exporting their products to the highly competitive global market.

The stock markets in the Czech Republic have been facing difficulties due to low demand for trading and initially also an insufficient legislative framework. In this weeks edition of Economics Report, we talk to a capital market expert about the system of stock markets in the Czech Republic, their development over the past decade and some of the main problems. Of course, we also have the latest business news of the past seven days.

This week we take a closer look at the issue of unemployment, its development historically and what labour market experts think about the government's efforts to fight the most serious problem - long-term unemployment. We also have a round-up of other economics news.

In this week's Economics Report, we take a look at Prime Minister Vladimir Spidla's remarks regarding the Czech banking sector and his proposal that the banks should do more to support the government's economic policy. We talk to an economic analyst to get some feedback on why this is unlikely to happen. Also, a review of the latest economic headlines which are making news in the Czech Republic.

Over the past few years, the Czech Republic has attracted record volumes of foreign investment, becoming a leader in central and Eastern Europe in this respect. The main attractions of the country are its strategic geographic location, a generous investment incentive programme, and last but not least, a relatively cheap but highly qualified and skilled labour. But has not cheap and skilled labour become a journalist cliché, especially concerning the much needed language skills, an area heavily neglected by the former Communist regime?

The Czech government has approved a package of measures to raise extra money to finance repair of damage caused by the recent devastating floods. The government hopes to gain an extra 26 billion crowns for the state budget over the next two years.

Czech GDP growth slowed down in the second quarter of 2002 to 2.5 percent year-on-year, from 2.8 percent in the first quarter. It is the worst result since the third quarter of 2000. In the corresponding period of 2001, Czech GDP grew at a pace of 3.5 percent annually. Experts say the main factor behind the slowdown is weak foreign demand.