Economic growth in the Czech Republic remains robust, despite a slowdown in 2016. Labour market outcomes have improved considerably in recent years but there is now a growing risk of labour market shortages.Inflation has accelerated and the Czech National Bank (CNB) has signalled that it will exit from its exchange rate commitment no earlier than in the second quarter of 2017.Overall, the Czech Republic has made some progress in addressing the 2016 country-specific recommendations. 

While substantial efforts have been undertaken to tackle tax non-compliance, only a few measures are being pursued to simplify the tax system or to reduce the costs associated with paying taxes. 

Pension and healthcare expenditure poses a risk to the long-term sustainability of public finances.

In the context of a tight labour market, the participation of under-represented groups, including women with young children and low-skilled workers, remains low.

Reform measures aimed at improving the inclusiveness of compulsory education started to be implemented in 2016.

Investment is hampered by inefficiencies in the business environment, in particular related to the regulatory burden, and other administrative hurdles.

While R&D investment has increased, governance reforms are not being fully implemented yet.

The incidence of corruption in the Czech Republic continues to be perceived as major ongoing problem.

Public procurement indicators reveal significant inefficiencies and challenges.

The use of e-government services in Czech Republic is one of the lowest in the EU, but has increased from 2015.

Read full report here. Read also European Commission Winter 2017 Economic Forecast.