Czech Republic Economic Snapshot
Economic Forecast Summary (June 2023)
Economic Outlook Note - Czech Republic
GDP growth will slow to 0.3% in 2023, before picking up to 2.4% in 2024. In 2023, high energy prices, tight financing conditions and weak sentiment will hold back private investment, and still elevated inflation will constrain private consumption. Private consumption will pick up in 2024, underpinned by growing real wages. Inflation will start falling from currently high levels but will only approach the 2% target towards the end of 2024. The unemployment rate will remain low, close to 3%.
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Read full country noteEconomic Survey of the Czech Republic - 30 March 2023
Spillovers from Russia’s war of aggression against Ukraine have derailed the Czech Republic’s post-pandemic recovery and further disrupted the impressive catch-up with OECD average incomes seen in the previous two decades. Inflation is high and a tight macroeconomic policy stance is needed to restore price stability. Fiscal pressures have risen. Reforming pensions and taxes could help maintain fiscal sustainability. The Czech labour market remains strong. The unemployment rate is low, and the employment rate and job security are high. However, severe labour and skills shortages are a major obstacle to growth. Bringing more mothers to work and increasing labour participation of older workers can help in this regard. More equitable provision of education and skills, effective lifelong learning and attracting and retaining skilled foreign labour would ease skills shortages and spur growth. The Czech economy remains highly energy intensive, still relies heavily on coal and records high greenhouse gas emissions. Major investments are needed to alter the energy mix and to improve energy efficiency. More ambitious environmental policies and an improved investment climate could help make growth more sustainable.
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Reform Priorities (April 2021)
Going for Growth 2021 - Czech Republic
The recovery offers an opportunity to focus on productivity-enhancing investment and upskilling, including better targeting of R&D support and improved business environment.
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Read full country note2021 Structural Reform Priorities
- Labour market: Make the labour market more fluid and inclusive
- R&D and digitalisation: Enhance R&D investment and improve business environment
- Environmental policy: Pursue greener growth
- Labour market: Reform the pension system and promote longer working lives
- Public sector efficiency: Improve public sector efficiency by consolidating local government services