Economy - The Czech Republic

Result code in IS VaVaI

<a href="https://www.isvavai.cz/riv?ss=detail&h=RIV%2F00216208%3A11640%2F24%3A00618206" target="_blank" >RIV/00216208:11640/24:00618206 - isvavai.cz</a>

Result on the web

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DOI - Digital Object Identifier

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Result language

angličtina

Original language name

Economy - The Czech Republic

Original language description

Since the accession of the Czech Republic (Czechia) to the European Union (EU) in 2004, the country’s economy has experienced an increasing trend in convergence towards its Western counterparts. After the global financial and economic crisis during 2008–13, the Czech economy started to recover quickly, and in 2021 gross domestic product (GDP) per head, measured in purchasing-power parity terms (PPP), reached 93% of the EU average. In fact, the Czech Republic surpassed Southern European countries such as Spain and Italy in GDP per capita on the basis of PPP. Yet, the potential for higher growth was undermined by a severe crisis in the country following the COVID-19 pandemic. Notably, due to the pandemic and a number of ensuing lockdowns, GDP declined sharply, by 5.5%, in 2020. An expansionary fiscal and monetary policy played an important role during the pandemic crisis in minimizing the decline in economic activity. Due to the fiscal stimulus, GDP increased by 3.6% in 2021, with the renewed growth supported by higher domestic consumption and capital expenditure. On the negative side, GDP growth was hampered by weak foreign demand, which was related to the disruption of global supply chains and the consequent slowdown of domestic export-orientated industrial production. Meanwhile, Czech companies faced a growing increase in production costs, resulting in a 4.1% inflation rate in 2021. Another event with a severe impact on the Czech economy was the Russian Federation’s invasion of Ukraine, which began in February 2022. The war in Ukraine, together with resulting wide-ranging sanctions imposed by the EU against Russia, have disrupted trade, in particular exports from the region of commodities such as oil, gas, metals and foodstuffs, and raised inflation to levels not seen for a long time. Thus, amid continuing strong inflationary pressures, the rise in consumer prices reached a high of 18% in 2022. In response, the Czech National Bank (CNB) gradually increased interest rates to 7% in 2023, which, together with weakening global inflationary pressures, contributed to a decline in inflation to around 11% in 2023 and to the target level of 2% in May 2024.

Czech name

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Czech description

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Type

C - Chapter in a specialist book

CEP classification

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OECD FORD branch

50202 - Applied Economics, Econometrics

Project

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Continuities

I - Institucionalni podpora na dlouhodoby koncepcni rozvoj vyzkumne organizace

Publication year

2024

Confidentiality

S - Úplné a pravdivé údaje o projektu nepodléhají ochraně podle zvláštních právních předpisů

Book/collection name

Central and South-Eastern Europe 2025

ISBN

978-1-032-76104-6

Number of pages of the result

6

Pages from-to

185-190

Number of pages of the book

840

Publisher name

Routledge

Place of publication

London

UT code for WoS chapter

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