The Czech Ministry of Finance (MF) expects real gross domestic product (GDP) to decline by 5.6% and nominal GDP by 2.2%. Foreign trade and fixed capital investment are likely to decrease the most. Household consumption should also be lower (-1.5%). Starting from second half of the year 2020, economic activity is expected to recover. The ministry of finance anticipates a general government deficit of 4.1% of GDP. The inflation forecast for 2020 is 3.2% and for 2021 1.6%. The unemployment rate could rise to 3.3% and in 2021 to 3.5%. The ministry predicts economic growth of 3.1% for 2021. q
Chamber of Commerce - more than 25% of firms consider layoffs
Up to 37% of sole traders and companies may have difficulty repaying their liabilities to employees and suppliers in April 2020. At the end of March 2020 it was 8% of entrepreneurs. This stems from the analysis of the Czech Chamber of Commerce (HK ČR).
Czech Chamber of Commerce’s president Vladimír Dlouhý added that in May 2020 63% of businesses will be insolvent. Almost every third company has already used up all its financial reserves. Most of these are companies in the segment of tourism and restaurant services. 7% of employers made redundancies due to government action, again in the above-mentioned fields.
Provided by CzechTrade Jakarta