The growth of the Czech economy will approach four percent this year after last year’s record slump. According to today’s forecast of the European Commission (EC), the gross domestic product (GDP) of the Czech Republic will increase by 3.9 percent, and in the next year by 4.5 percent, despite the harsh effects of the spring restrictions. The previous May forecast projected growth of 3.4 for this year and 4.4 percent for next year.
According to the commission, the unexpectedly high volume of spring investments will contribute to a more favorable development. The economic recovery should be driven this year and next year mainly by household consumption, according to the EU executive.
According to the commission, the Czechia, more than a number of other countries, paid for the poor development of the winter wave of the pandemic, due to which the authorities reached unprecedented restrictions. In connection with them, GDP fell by 0.3 percent quarter on quarter in the first quarter. The economy started to recover from the second half of April and the mood among consumers and companies gradually began to grow in the country.
According to the commission, household demand, which will be supported by a relatively stable situation in the labor market and a high level of private savings, should contribute to the recovery this year and next. On the other hand, problems may be caused by restrictions on the supply of raw materials and materials, including semiconductors, which may affect the production and export of the automotive industry, which is crucial for Czechia.