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Czech consumer prices dropped sharply beyond market expectation in September. The Czech Statistics Office said prices in September were down 0.5 percent month-on-month, putting the year-on-year rate at 0.0 percent. Analysts had predicted that year-on-year inflation rate would reach +0.3 percent. I spoke to economic analyst Vladimir Pikora of the Prague branch of Volksbank about the main factors behind the latest development:

Czech unemployment rate reaches 10.1 percent. Czech industrial production shows massive growth. The government to sell two profitable coal companies. Express courier DHL to move information-related operations from Britain and Switzerland to the Czech Republic.

Czech National Bank Governor Zdenek Tuma urges government to proceed to the next stage of fiscal reforms. Czech business and consumer confidence worsens in September. Small coin withdrawal not expected to accelerate inflation. Dutch imaging company Oce considers moving printer assembly to Czech Republic.

The British automotive company MG Rover has been seeking new potential trade partners in the Czech Republic to supply automotive parts to the UK. The suppliers should be globally competitive, because Central Europe is only one of many geographical areas where MG Rover has sent its envoys.

Parliament debates fiscal reforms. Foreign trade deficits narrows to 7 billion CZK. A 27-percent stake in Czech Telecom up for sale. EIB lends 75 million euros for construction of Prague Metro.

A few days ago, the Czech National Property Fund introduced a new project to establish a legal framework for Public Private Partnership. In this week's Economics Report, we discuss this alternative method of government procurement with the chairman of the executive committee of the National Property Fund, Jan Juchelka.

Czech central government debt reaches nearly 20 percent of GDP. Retail sales continue to grow. PM says latest real wage growth unsustainable. Japan's Steel Europe Center to build a new plant in Humpolec. Lukoil not interested in Unipetrol, leaving Czech market. Small vendors of electric appliances unite to fight retail chains. Anglian Water seeks to sell stakes in Czech water utilities. Falkon Capital to lose contract for recovering Russian debt. Russia offers old trains to offset part of its debt to the Czech Republic. Foreigners employed in the

Czech industrial output rises but less than expected. Development bank urges Czechs to sell state companies. Unemployment reaches "psychological barrier" of 10 percent. Czech economy shows weak performance amid continuing deflation. Central bank to harmonise interest rates on commercial banks' accounts. DHL is to build a European IT centre in Czech Republic.

The Czech government's trade promotion agency, CzechTrade, the Czech branch of the international audit and consultancy company Deloitte & Touche and the consultancy firm Adwise have launched a new service for Czech companies - a practical training course aimed at helping companies with gathering information about foreign markets, building knowledge management systems, and improving their presentation skills.

The Czech cabinet has failed to agree on the 2004 draft state budget. The government's factoring agency, Konsolidacni Agentura, has said it will offer investors 40-50 billion Czech crowns worth of non-performing assets. Former defence minister has been appointed chairman of Czech Airlines. Russia is considering raising duty on Czech Skoda cars by 6 percent. Skoda Auto has been negotiating with the Kazakh government about building a car production plant in Kazakhstan.