Czech Statistical Office published an overview of the economic trends in Czechia in the second half of 2023.

A look back at last year reveals the problems of an economy that has undergone a series of unusually strong shocks in recent years. From the pandemic to the energy crisis. Unfortunately, the Czech Republic is the only EU country that has still not been able to cope with the negative effects of these shocks and where the performance of the economy has still not reached the level of the end of 2019.  However, last year can also be seen as a turning point. The government was able to push through a consolidation package that should bring public finances significantly closer to a sustainable long-term position. In other words, the growth rate of government debt as a share of GDP should slow down significantly in the coming years. 

The ECB’s Christine Lagarde described inflation as holding too high for too long. CNB vice-governor Eva Zamrazilová viewed Czech inflation similarly during our AmChamIntel talk.   The CNB predicts a higher rate and the consolidation of public finance will bring inflation back to approximately 2% by Q3 2024.