OECD Economic Surveys: Czech Republic 2020
![image of OECD Economic Surveys: Czech Republic 2020 image of OECD Economic Surveys: Czech Republic 2020](https://assets.oecdcode.org/covers/100/1b180a5a.jpg)
After a long period of impressive convergence to the OECD average incomes, the Czech Republic is now battling the social and economic consequences of the COVID-19 pandemic. The economy contracted due to strict containment measures, but the authorities extended generous support to maintain incomes, employment and liquidity. The economic recovery is expected to be gradual. The crisis heightens the need to continue addressing long-term challenges with disappointing productivity growth, low labour participation of mothers, pressures due to population ageing and high energy and carbon dependence. Sustainable growth will raise living standards and help restore fiscal and monetary policy space. In addition, despite overall low inequality, there is considerable regional variation in incomes and poverty, and the gaps have grown over time. The Czech Republic suffers from a highly fragmented subnational government with the highest number of municipalities per head in the OECD. The resulting lack of capacity at the local level impacts the quality of public services and impedes the uptake of effective development projects.
SPECIAL FEATURE: ENHANCING ADMINISTRATIVE AND FISCAL DECENTRALISATION
Also available in: French
Key Policy Insights
As most of the world, the Czech Republic is battling the social and economic consequences of the new coronavirus pandemic (Figure 1.1). The government reacted swiftly by introducing strict containment measures in March, and much of the social and economic activity – domestic as well as international – was brought to a halt during March and April. While the first wave of the outbreak was effectively contained, the Czech Republic is undergoing an even stronger second wave. Recovery, which started as soon as the initial lockdown was lifted in April, is now stalling due to a renewed lockdown and restrictions on certain activities. Uncertainty remains elevated and economic growth is expected to resume only slowly over the coming years.
- Click to access:
-
Click to download PDF - 1.10MBPDF