Video transcript
Over the past 3 decades, Czechia’s living standards have improved significantly due to openness to trade, investment, and a strong institutional framework.
Growth is projected to rise to 2.1% in 2025 and 2.5% in 2026.
However, risks are elevated and include disruptions in global trade and geopolitical tensions.
Czechia’s productivity growth has slowed, leaving a sizeable productivity gap with the OECD average.
Better targeting R&D support, developing capital markets, and improving business regulations can help revitalise productivity growth.
To boost innovation and business dynamism:
- Make the R&D tax allowance refundable.
- Improve conditions for institutional investors to invest in venture capital.
- Establish a one-stop-shop and introduce silence-is-consent rules to streamline administrative procedures to obtain licenses.
While school outcomes are strong, educational disparities remain high.
Skill shortages and mismatches are severe.
To improve education and skills:
- Increase high-quality and affordable early education and care capacity.
- Promote a greater variety of career paths for teachers.
- Reform vocational education and training and expand work-based learning.
- Introduce support for students to raise tertiary education attainment.
Achieving climate neutrality by 2050 will require substantial reforms and investment.
Phasing out coal by 2033 and accelerating renewable energy deployment is essential to reach net-zero emissions.
To achieve climate targets:
- Phase out fossil fuel subsidies and increase effective carbon prices in sectors outside the EU Emission Trading System.
- Further simplify permitting procedures for renewable energy.
- Expand active labour market policies, especially targeted training and reskilling programmes.
To learn more, read our Economic Survey of Czechia 2025.