Czech Economy Experienced A Record Decline In 2020

The economy in the Czech Republic experienced a record decline in 2020 amid the coronavirus pandemic.

The preliminary figures from the Czech Statistics Office released on Tuesday show that the Czech economy contracted by 5.6% last year compared with the previous year.

It is the worst result for the economy since the split of Czechoslovakia in 1993.

In the last quarter of 2020, the economy expanded by 0.3% compared with the previous quarter, mainly due to demand for Czech goods from abroad. The office said local household consumption and investments were down throughout the year.

The export-oriented Czech economy relies heavily on car production, an industry badly hit by the pandemic.

The development of the economy last year was marked by restrictions on trade, services, or movement introduced by the state since March due to the covid-19 epidemic.

The European Union performed worse than the Czech Republic last year, with EU GDP falling by 6.4 percent. In the eurozone countries, the decline was even more pronounced, at 6.8 percent.

Year-on-year, the Czech economy weakened every quarter last year. In the second quarter, GDP fell by more than ten percent, according to previously published CZSO data.

According to statisticians, in addition to reducing household consumption, the decline in foreign demand in the first half of the year contributed to the year-on-year decline.

According to the CZSO, the decline in the so-called gross value-added, which is the difference between the total value of the production of goods and services and the production cost, most significantly affected trade, transport, and accommodation developments, and hospitality. But the industry, construction, and most service sectors also failed.