Economic Survey of the Czech Republic 2010

 

Contents | Executive summary | How to obtain this publication | Additional information 

 

 

   

The next Economic Survey of the Czech Republic will be prepared for end 2011.

 

An Economic Survey is published every 1½-2 years for each OECD country. Read more about how Surveys are prepared.

The OECD assessment and recommendations on the main economic challenges faced by the Czech Republic are available by clicking on each chapter heading below.

The Policy Brief (pdf format) contains the OECD assessment and recommendations.

Czech version

 

Bookmark this page : www.oecd.org/eco/surveys/czech 

Speech by Angel Gurría, OECD Secretary-General

Contents

Chapter 1: The challenge of fiscal consolidation after the crisis

This chapter describes how the global crisis hit the economy and the channels through which the external shock made itself felt. It then examines the policy response to the crisis before proceeding to consider the major medium- and long-term challenges confronting the authorities during the recovery. The most important of these concern the state of public finances. First, there is an urgent need for a clear and credible strategy for medium term fiscal consolidation that would bring the general government deficit down from their current unsustainable levels. Secondly, the authorities should move ahead with the reforms needed to address the fiscal consequences of rapid population ageing. Previous Surveys have identified this as a major long-term challenge facing the country, but structural reforms in healthcare and pensions, the two areas of greatest concern, have largely stalled. The current crisis has in some respects made it harder to advance reforms in those areas, but it has done nothing to diminish the need for them.

 

Chapter 2: Further advancing pro-growth tax and benefit reform

In 2008, the government implemented a major overhaul of the personal income tax (PIT), replacing the previous progressive rate schedule with a single 15% rate levied on an enlarged base. This was accompanied by significant changes to the corporate income tax (CIT) and an increase in the concessionary rate of value added tax (VAT) applied to many goods and services. The reform made the tax system more transparent and was broadly consistent with OECD recommendations concerning pro-growth tax reform. These tax changes followed the adoption of significant changes to the benefit system, particularly housing and social assistance benefits, in 2006-07. This chapter describes the main elements of these tax and benefit reforms and provides an initial assessment of their impact, with particular emphasis on changes in the effective tax rates of workers and firms. It begins with an overview of the systems and a summary of recent changes. This is followed by an evaluation of those reforms. A final section explores the scope for further reforms in future.

 

Chapter 3: Improving the business environment

This chapter assesses recent regulatory reforms and considers the scope for future initiatives in this area. It begins with a look at the substance of product- and labour-market regulation before turning to the questions of regulatory policy per se, particularly simplification and impact analysis. Both substance and process are important, since recent OECD and academic research suggests that less burdensome product- and labour-market regulation and better regulatory management systems are both associated with better performance in terms of output, employment and productivity. A final section looks at the contribution that e-government is making to these efforts and at the areas where the authorities could do more to use e-government methods to enhance the business environment. 

 

How to obtain this publication

The complete edition of the Economic Survey of the Czech Republic is available from:

 

Additional information

For further information please contact the Czech Republic Desk at the OECD Economics Department at eco.survey@oecd.org.

The OECD Secretariat's report was prepared by William Tompson, Zuzana Šmídová, Laura Vartia, Zdeněk Hrdlička and David Prušvic under the supervision of Andreas Wörgötter. Research assistance was provided by Margaret Morgan.

 

 

 

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