The Czech Republic is fighting the social and economic consequences of the pandemic
Fiscal and monetary policies stepped in to support the economy
The Czech Republic was rapidly converging towards the OECD average
Prior to the crisis, the Czech Republic performed well in many aspects of well-being
Income inequality is one of the lowest in the OECD
Labour productivity growth has stalled and remains below the OECD average
The population is ageing rapidly
The Czech health system was relatively well equipped to respond to the crisis
The Czech Republic is experiencing a strong second wave
Economic developments
The recovery stalled due to renewed containment measures and elevated uncertainty
The stock market and the exchange rate lost value after summer gains
High integration in global value chains amplifies crisis impacts
Unemployment started to rise and wage growth slowed
Inflation hovered above the upper boundary of the tolerance band for most of 2020
The central bank moved quickly to support the economy
Long-term interest rates do not show signs of stress
The public deficit and debt will rise from low levels
There is room to boost active labour market policies
Ageing-related expenditures put strong pressures on fiscal sustainability
The old-age dependency ratio is set to rise significantly
The adequacy of pensions could be improved
Effective age of retirement is low
Tax revenues rely heavily on social security contributions
The average tax wedge is high
There remains scope to increase receipts from VAT
There are many self-employed
Czech Republic performs poorly in control and perceived risk of corruption
There is scope to strengthen Czech Republic's anti-bribery enforcement across borders
Integration in Global Value Chains (GVCs) is high and there have been substantial FDI inflows
The Czech Republic specialises in manufacturing, but gaps in productivity remain
R&D intensity and innovation performance are low, and adoption of new technologies is slow
ICT task intensity and share of non-routine employment are relatively low in manufacturing
Czech SMEs have low productivity and they invest relatively little in R&D
A major share of the R&D investment comes from business investment from abroad
Government financial support of R&D has risen over the last decade
Capital market is underdeveloped and very little venture capital is available
The Czech Republic ranks low on a number of Doing business indicators
Green growth indicators
FigureĀ 1.40.Employment rate is high and has risen over time
Employment gaps of certain groups are large
Gender gap in employment and wages is higher than in many peers
Motherhood has a big effect on labour market activity
Family cash benefits and tax breaks are generous
Enrolment of children under three in early childhood education and care is among the lowest
High-skilled jobs are replacing low-skilled jobs and many jobs will be changed by technology
Socio economic status has a strong impact on student performance and schools differ in quality
Adult education for low-skilled workers should be strengthened