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Czech Republic: 2024 Article IV Consultation-Press Release; and Staff Report
Author:
International Monetary Fund. European Dept.
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Series:
IMF Staff Country Reports
Volume/Issue:
Volume 2025: Issue 035
Language:
English
Publication Date:
04 Feb 2025
DOI:
https://doi.org/10.5089/9798229000031.002
ISBN:
9798229000031
ISSN:
1934-7685
Pages:
68
Keywords:
currency of the Czech Republic; FSAP update; FSAP participation; services inflation; managing inflation risk; Inflation; Productivity; Labor markets; Central bank policy rate; Global
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The 2024 Article IV Consultation highlights that the Czech Republic is evolving from a heavily manufacturing-based, export-oriented hub to a more mature and diversified economy. Non-auto manufacturing, energy, and construction, once important Czech engines of growth, have run out of steam, hampered by decelerating productivity growth, higher energy costs, and sluggish demand. The auto industry has shown resilience so far, but the required transition to electric vehicles and exposure to foreign competition are set to exert significant pressures in the coming years. After stagnating in 2022-23, the Czech economy is slowly recovering, as consumer spending is sustained by a rebound in real wages. Growth is poised to gain momentum as the policy mix becomes more supportive of economic activity and external demand gradually strengthens. Concrete actions should focus on facilitating the allocation of labor towards higher value-added sectors and firms, addressing the gender pay gap to boost labor participation, reducing administrative burden and red tape, accelerating digitalization, and promoting a more ambitious green transition.
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Cover IMF Staff Country Reports
IMF Staff Country Reports
ISSN:
1934-7685
Publisher:
International Monetary Fund