The Czech economy is likely to contract by 8 percent this year, while the number of unemployed in the country could double to more than 500,000 people. According to Czech National Bank governor Jiří Rusnok, the era of runaway wage inflation has ended in most sectors as most companies will be fighting to be able to hold onto the staff they have. Even with stores and businesses being allowed to open up again and people returning to work, Rusnok said that many people will think twice before spending on big ticket items. The result is that while if all goes well, GDP could rise in 2021 by 4 percent, it will take longer than just a year to get the economy back to where it was just a few months ago. “The negative effects of reduced foreign demand will remain as will an extremely poor perception of the economic situation by Czech households and firms,” Rusnok told Mlada fronta Dnes.
