The breakdown in global supply chains has hit the Czech economy as a lack of components from China and other countries has combined with the cancellation of events, closed hotels and restaurants to slow the economy. “If these limitations were to stay in effect until April, it would be bad for the economy but the difference could be made up in the coming months,” said Radomír Jáč, chief economist of Generali Investments CEE in an interview with Hospodářské noviny. “But if they were to continue for several months, we would see the impact on the activity of companies and the labor market.” He said the biggest impact would be on the restaurant, hotel and tourism sectors. The last of these produces around 3 percent of all Czech GDP and employs 240,000 people. HN warns that the Chamber of Commerce has warned that 40,000 people could lose their jobs. Tourism associations and unions are already calling for a temporary reduction in VAT rates for hotels while tourist agencies are asking to be allowed to defer tax payments.
