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Economic growth is projected to remain strong in 2019 and 2020, although it will slow. Increasing wages and low unemployment will keep household consumption growth high. Private investment will stay robust, in particular in housing and manufacturing. Export growth will continue to be solid. However, labour shortages will remain a bottleneck to higher economic growth.
Inflation will stay above the target of the central bank. As the exchange rate remains relatively stable, monetary policy should keep on progressively normalising interest rates. Fiscal policy is slightly expansionary and, if needed, further government spending could be used to support long-term growth. Fiscal space is ample to invest in infrastructure, childcare facilities and training to boost productivity, labour participation of women with young children and older workers.
Source: OECD Economic Outlook 104 database.
Economic Survey of Czech Republic (survey page)