In an interview with Novinky.cz, the governor of the Czech National Bank Jiri Rusnok said that even without a second wave of the coronavirus, the economy is likely to endure an 8 percent stop in GDP. The real impact of the lockdown won’t really be felt until near the end of the year, however, when rising unemployment and falling wages will finally become more evident. Rusnok says companies will have to react to falling demand, but they will only fire people gradually, when necessary. He predicts that joblessness will rise to as much as 5 percent and that the constant upwards spiral in wages that employees got used to in recent years are a thing of the past. The current national budget deficit stands at between 8 percent and 10 percent thanks to a wide variety of support programs launched by the government. But Rusnok says that falling tax revenues are also playing a huge role in the deficit. “From a macroeconomic standpoint, the Czech Republic can afford it,” said Rusnok.
