The Czech economy is thriving, marked by robust employment, expanding exports and falling government debt, suggest the 2018 0ECD Economic Survey and the Environment Performance Review of the Czech Republic. The survey was presented by OECD Secretary-General Angel Gurría on Monday.
“The Czech economy is booming, but labour and skills shortages could create a bottleneck that would cramp future growth,” OECD Secretary-General Angel Gurría said during a presentation of the report in Prague this week.
“Upgrading and updating professional skills would be a win-win for inclusive growth as it would help improve job quality, raise wages and advance wellbeing, ensuring that all Czech citizens benefit from economic progress,” he said.
The report also suggests that greater flexibility in workhours and more affordable childcare could help ease the labour squeeze by increasing share of women in work, particularly those with children.
According to the OECD report, Czech GDP is expected to grow by 3.8 percent this year and should be mainly driven by strong demand stemming from rising salaries and export growth. Next year, it should slow to 3.2 percent.
The OECD warned that Czech property prices, which are the highest in the EU last year compared to wages, represent a risk to the stability of the economy. The organisation also recommended reducing the overall tax burden.
Regarding Czech healthcare, the report states that it fares well compared to other Central and Eastern European economies, but needs changes in its funding.
According to the report the role of state in healthcare should be diminished while the system should adapt to the ageing of the population.
The Czech Republic is one of the fastest ageing countries in Europe, with the ratio of pensioners set to rise from 28 percent in 2016 to 56 percent in 2058. The report warns that ageing-related spending makes up to 43 percent of the government budget and could rise to 75 percent without action.
OECD Secretary-General Angel Gurría also presented a new Environment Performance Review of the Czech Republic, which says the country belongs among the most carbon intensive in the OECD due to its large heavy industry sector and its reliance on coal.
The report concludes that a greater political commitment to a low-carbon economy will be needed to meet long-term climate goals, including the Paris Agreement.
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