## Czech Republic: Selected Issues

_IMF Staff Country Reports, February 4, 2025_

## Source details

**Canonical URL:** [Czech Republic: Selected Issues](https://www.imf.org/en/publications/cr/issues/2025/02/01/czech-republic-selected-issues-561476)

## Other formats

- [Markdown version](/en/publications/cr/issues/2025/02/01/czech-republic-selected-issues-561476/index.md)
- [Structured JSON version](/en/publications/cr/issues/2025/02/01/czech-republic-selected-issues-561476/index.json)
- [Bundle manifest](/en/publications/cr/issues/2025/02/01/czech-republic-selected-issues-561476/bundle-manifest.json)

## Bibliographic details
- Published: February 4, 2025
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9798229000192.002

---

### Overview and context
- Discusses perspectives on the Czech Republic’s structural productivity slowdown.
- Notes the Czech economy has underperformed European peers in the post-pandemic period and economic convergence has come to a halt.
- Attributes this outcome often to the country’s links to specific slow growing trading partners and to its energy-intensive economic structure.
- Highlights that a decline in productivity, along with a slower increase in the labor force, has been a crucial factor.

### Causes and dynamics of the productivity slowdown
- Declining productivity is the central challenge examined.
- Multifaceted factors and dynamics are uncovered, including:
  - Links to specific slow growing trading partners.
  - An energy-intensive economic structure.
  - Sector-specific bottlenecks that impede productivity growth.
  - Slower labor force expansion interacting with productivity trends.
- Indicates structural transformation may be inevitable but need not adversely affect productivity.

### Empirical findings
- Empirical analysis suggests:
  - Further R&D investment could reduce gaps with the total factor productivity frontier.
  - Sector-specific bottlenecks should be addressed.
  - Productivity-enhancing labor reallocation could be better supported by more targeted policies.
- Suggests the Czech Republic may evolve towards a more mature, diversified economy with certain services playing an increasingly significant role.

### Policy implications and recommendations
- Increase R&D investment to narrow gaps with the EU TFP frontier.
- Address sector-specific bottlenecks that constrain productivity improvements.
- Support productivity-enhancing labor reallocation through more targeted policies to facilitate structural transformation without repeating recent adverse productivity outcomes.
- Monitor and manage the implications of links to slow growing trading partners and the economy’s energy intensity for medium-term convergence prospects.

*Source: Czech Republic: Selected Issues (IMF Staff Country Report)*

---

## Content in this bundle

- **Czech Republic: Selected Issues; IMF Country Report No. 25/36; January 7, 2025**
  - [Czech Republic: Selected Issues; IMF Country Report No. 25/36; January 7, 2025 (Markdown version)](/-/media/files/publications/cr/2025/english/1czeea2025002-print-pdf.pdf.md){rel="alternate" type="text/markdown"}
  - [Czech Republic: Selected Issues; IMF Country Report No. 25/36; January 7, 2025 (PDF)](/-/media/files/publications/cr/2025/english/1czeea2025002-print-pdf.pdf){rel="external" type="application/pdf"}

---

_Source: https://www.imf.org/en/publications/cr/issues/2025/02/01/czech-republic-selected-issues-561476_