The Czech economy is teetering on a cliff edge. Real‑GDP growth has slipped to a modest 2.3 % in 2024 – still above the EU average of 0.7 % but far from the double‑digit differentials that once made Prague the engine of Central Europe. Quarterly Eurostat figures show GDP hovering around €1.33 trillion in Q3 2025, a barely perceptible rise on the €1.30 trillion level a year earlier, underscoring an output engine that is sputtering rather than roaring.
Beneath the headline numbers, deeper structural cracks are widening. The latest productivity statistics are missing entirely, leaving policymakers blind to whether total‑factor efficiency is stagnating or declining. Inbound foreign‑direct investment data for 2023‑2024 are similarly opaque, a data vacuum that fuels investor uncertainty. At the same time, the older‑age dependency ratio has crept up to 32.7 % in 2024, tightening the labour market and inflating the fiscal burden of pensions.
Leading Czech economists warn that these trends signal a long‑term erosion of the country’s growth model and call for a “strong hand” to steer a democratic renewal of economic policy. They argue that without decisive political leadership, the convergence of sluggish output, invisible productivity, and an ageing workforce will erode the Czech Republic’s competitive edge within the EU and diminish its voice in Brussels.
The only concrete reform on the table so far is the amendment to the School Act that creates short‑cycle, EQF‑5 vocational programmes. Launched in June 2025, the one‑ to two‑year pathways deliver a professional specialist certificate through close cooperation with employers, bypassing the lengthy accreditation process. By fast‑tracking market‑relevant skills, the scheme aims to plug the emerging skill gap, boost the supply of qualified workers and make Czech qualifications instantly recognisable across the European Qualifications Framework.
If the EQF‑5 rollout succeeds, the Czech Republic could sharpen its bargaining position in EU labour‑mobility discussions, presenting a model of competency‑based education that aligns with the bloc’s push for a more fluid workforce. However, the reform’s impact will be limited unless it is complemented by a broader package: transparent productivity monitoring, clearer FDI reporting, and a coherent stance on the EU ETS‑2 reform.
Other long‑promised measures remain unverified. No legislative text has emerged on repealing restrictive non‑compete clauses, on an AI‑innovation tax credit, or on the country’s position in the forthcoming ETS‑2 negotiations. The absence of these policies leaves a critical gap in a strategy that should also address demographic pressures through family‑friendly incentives and active‑ageing programmes.
In short, the Czech Republic faces a fork‑in‑the‑road: either embrace a decisive, data‑driven overhaul that couples the EQF‑5 vocational boost with transparent productivity metrics and a clear climate policy, or watch its growth engine sputter into irrelevance. The stakes are not merely economic – they determine how much influence Prague will retain in shaping the EU’s fiscal, labour and climate agenda for years to come.
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