Czech economy will fall an estimated 8 percent of GDP this year, according to lead economist

After the coronvirus pandemic, the expert said, economies around the world will slowly start to pick up again -- but it will take time for a full recovery

Samantha Tatro

Written by Samantha Tatro Published on 24.06.2020 09:02:51 (updated on 24.06.2020) Reading time: 1 minute

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The Czech economy will fall much more than initially expected in 2020, according to a leading Czech economist.

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The country will lose approximately 7.5 to eight percent of its national GDP during the year, Jan Švejnar, head of the Economic Advisory Team at the Central Crisis Staff and the director of IDEA at CERGE-EI, told Seznam Zpravy.

After the coronavirus pandemic, the expert said, economies around the world will slowly start to pick up again — but it will take time for a full recovery.

“If the world economy returns to a boom, domestic export-oriented industry and trade-able services will benefit,” Švejnar said. “But I am worried that the global economy will not get back on its feet so quickly. So there will be a rise, but all economies will be weaker than they were before coronavirus last year.”

The economic downtown could be even greater if the second wave of coronavirus hits, Švejnar predicted. Czech Republic could see a double-digit drop in GDP. 

The Czech government is offering companies significant assistance to help speed up the recovery from the coronavirus pandemic. Despite the aggressive plan, Švejnar said, the assistance still may not be enough. The economist said the assistance wasn’t fast enough for multiple small- and medium-sized companies that have since gone bankrupt.

“The amount of money provided and the guarantee is not enough,” Švejnar told Seznam Zpravy.

Programs meant to help workers, like the postponement of social and health insurance contributions, has been a positive step to help the economy, the economist said. Unemployment has stayed relatively low across the country, Švejnar said, but will likely rise in the future as the economic downtown continues.

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