Czech central bank governor sees euro entry delay due to crisis

(PRAGUE) - The current financial crisis will likely delay the Czech Republic's adoption of the euro, Czech National Bank governor Zdenek Tuma said Sunday.

"I think we will need a time out to wait for financial markets to calm down," he said in a debate on Czech television.

"I believe the current problems on financial markets should pass in a few months, and we may reopen the issue next year."

The Czech centre-right governing coalition has been putting off a decision on the euro entry date since it came to power in January 2007 despite pressure from local companies and business leaders.

Tuma added Czech economic growth will probably lag behind the 3.6 percent pace predicted by the CNB for 2009 because of the crisis.

"We will present the next forecast (for 2009) at the beginning of November, and I can't say now whether it will be 3.3 or 3.1 percent," Tuma said.

The International Monetary Fund said earlier this week it expected the Czech economy to grow by four percent this year and by 3.4 percent in 2009.

In 2007, Czech gross domestic product (GDP) grew by a record-high 6.6 percent.

"Our huge advantage is that we were at the peak of the economic cycle last year, and we expected a slowdown this year. But the slowdown will undoubtedly be somewhat bigger," Tuma added.