The Czech Republic has experienced a strong economic rebound over the last two years. In 2014, the economy emerged from a prolonged period of low growth in the aftermath of the global financial crisis, followed by two years of recession. The rebound has largely been driven by domestic demand. Real GDP growth is expected to have reached 4.5 % in 2015, according to the Commission 2016 winter forecast. This is partly due to strong growth in public investment, with the Czech authorities trying to catch up on their drawdown of EU funds from the 2007-2013 programming period. An expected fall in public investment should contribute to slower GDP growth in 2016 but a pickup is expected in 2017. Risks to this forecast are on the downside, however, with the highly-open Czech economy particularly vulnerable to lower than expected world or euro area demand. There has been a marked improvement in the government's finances, with the general government deficit expected to fall to 1.1 % in 2016 and government debt remaining well below 60 % of GDP.
2015 recommendations in brief
The Commission has made four country-specific recommendations to the Czech Republic to help it improve its economic performance. These are in the areas of: public finances and health; taxation; taxation on labour; education.