Simple liberalization of energy prices would open up scope for natural monopolies, who then would gain full control over the liberalized price. Liberalization of rents would bring about a range of social problems which would require some compensating response. We have to realize that regulated rents do not concern all citizens and that not all those who would be affected by their liberalization would necessarily need compensation for a higher cost of living. Price deregulation and possible further liberalization measures are factors which are again difficult to estimate for the coming year. This makes it impossible for the central bank to publish a more accurate prognosis of the currency development.
Uncertainty also exists in relation to wage development.
Acceleration of nominal wages running ahead of the growth of labour productivity constitutes significant disequilibrium which under certain circumstances may turn into considerable inflationary pressure, affect the crown's exchange rate and naturally also the rate of employment and overall economic growth. In negotiating these agreements employees naturally push for the highest possible wage increase but while respecting the limit which might threaten their company's development and consequently affect their own jobs. Similar compromise should be reached in Czech companies so as to make the overall growth of wage costs proportionate to the economic growth. It is an open question, however, whether such agreements will be reached. All in all, only several basic notes can be formulated in relation to the Czech economy's development in 1997.