A complete abandonment of the use of fossil fuels is a long-term process

Caspian Energy (CE): What risks are affecting the Czech economy today? 

Karel Havlíček, Deputy Prime Minister, Minister of Industry, Trade and Transport of the Czech Republic: The forecasts for our economy are at this time positive. We expect that the growth of Czech real GDP will be more than 3.2 % for the year 2021 and more than 4 % for the year 2022. Of course, the base effect stemming from production shutdowns in spring 2020 also played a role.

The main negative factor for the Czech Republic and other economies is the epidemic situation. One problem could be closing factories and the other could be a negative impact on global supply chains (this will be probably just temporary). But we expect that (due to ongoing vaccination of the population against COVID-19 and the high number of people who have contracted the disease) COVID-19 won´t be a big problem with macroeconomic consequences.

There were structural imbalances in the labor market before COVID-19. There was a relatively big mismatch between demand and supply of jobs. And the first available data after COVID-19 show us a similar picture.

The next risk is an overvaluation of residential property prices. But at this time, we don´t observe a major increase in the volume of non-performing loans.

The automotive industry is crucial for the Czech economy, its procyclicality could be a risk. The other risks are structural changes (emission standards are gradually tightened or the transition to alternative propulsion will require huge investments). But I am optimistic and I am thinking about it mainly like about opportunities.