Czech economy in 2023

The Czech economy will suffer the most from the crisis in Europe. From the forecast of the European Commission, we see that the Czech Republic will still not be able to compensate for the consequences of the pandemic. The Brussels Analysis reports that the annual inflation rate in the Czech Republic will reach 11.7%, the highest after Bulgaria and Lithuania.

The Czech Ministry of Finance also expects the economy is unlikely to recover in 2023. However, data from the Czech Statistical Office do not show any serious difficulties.

The main Czech sector is industry, and it also remains afloat. Now there are no signs that the situation will change significantly. “Industrial companies have enough orders, and most of them do not even suffer from problems with materials,” the statistics say, including with reference to smelters.

The strengthening of the national currency will be the factor restraining inflation in the Czech Republic. According to the forecast, the Czech crown will strengthen to 24.4 crowns per euro next year, and the average exchange rate for 2024 will already be 23.6 crowns per euro.

You can read more about inflation in the Czech Republic here: Record high inflation in the Czech Republic since 1993

Czech economy

State budget of the Czech Republic

The main task taken into account in the draft state budget for 2023 is to help citizens and businesses overcome the energy crisis. The Government has provided for the allocation of budgetary assistance of more than 200 billion crowns. Of this amount, more than 100 billion crowns will be used to limit energy prices, and more than 50 billion crowns for the valorization of pensions.

On Wednesday, January 4, the government of the Czech Republic approved a bill aimed at financial support for defense up to the level required by NATO, as the war in Ukraine continues.

The Czech Republic has been a staunch supporter of Ukraine, providing Ukrainian forces with Soviet-era weaponry, including tanks. The government has issued nearly 475,000 visas to Ukrainian refugees, giving them access to health care, financial assistance, work permits and other benefits.

The Czech economy through the eyes of entrepreneurs

In December 2022, business confidence in the Czech Republic fell 0.5 points from the previous month to 92.5, marking a new lowest reading since March a year earlier, as sentiment eased among construction workers (107.7 vs. 115. 6) and retailers (92.7 versus 99). On the other hand, sentiment improved among manufacturers (91 versus 90.4), while it remained unchanged among service providers (92.4).
(Source: Czech Statistical Office)

In the Czech Republic, the Business Confidence Survey measures the level of optimism of people running companies about the performance of the economy and how they assess the prospects of their organizations. The Business Confidence Index of the Czech Statistical Office is a weighted average of seasonally adjusted confidence indicators for industry, construction, trade and selected services.

Czech economy