Czech Republic Economic Snapshot
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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2021 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
Economic Survey of the Czech Republic (December 2020)
Executive Summary
Presentation
Further reading
Economic Forecast Summary (December 2020)
GDP is estimated to contract by 6.8% in 2020, and projected to recover slowly, by 1.5%, in 2021. The economy has been hit hard by lockdown measures and a drop in trade. Additional containment measures, high uncertainty and weak sentiment amid the second outbreak will delay economic recovery until an effective vaccine is widely deployed towards the end of 2021. Fiscal support will help maintain household consumption, but investment will take longer to rebound. The unemployment rate will rise from low levels and inflation will slow.
The authorities reacted swiftly to the pandemic, supporting incomes, employment and liquidity. This supportive stance should be maintained. The central bank can further ease monetary policy in case of persistent weakness, beyond the conventional measures already implemented at the beginning of the crisis. Gradual fiscal consolidation is planned following a supportive budget for 2021. Care should be taken not to tighten fiscal policy too soon. Active labour market policies should be boosted to facilitate labour reallocation.