Economic growth has resumed, and inflation has returned close to target but risks to the outlook remain elevated. Fiscal policy should continue to build buffers and prepare for longer-term spending pressures, including by enhancing spending efficiency, fully implementing recent pension reforms and revising family benefits to reduce disincentives for mothers with young children to return to the workplace. Revitalising productivity growth and convergence requires boosting Czechia’s innovation capacity and business dynamism by better targeting business support for R&D to young and small firms, further developing capital markets and strengthening the eco-system for start-ups. To put the economy on a path to net-zero emissions, a more consistent pricing of carbon, accelerating the deployment of renewables, replacing coal, and reducing the energy and emission-intensity of the buildings sector are needed, while alleviating the impact on vulnerable communities. Addressing inequalities in education, increasing the quality and efficiency of schooling, and expanding possibilities to reskill and upskill workers throughout their careers are key to provide equal opportunities for all and tackle skill shortages.
SPECIAL FEATURES: IMPROVING EDUCATION AND SKILLS; BOOSTING INNOVATION AND BUSINESS DYNAMISM; TRANSITIONING TO NET-ZERO
