Labour Market Ready For New Workers, 2023 Economic Forecast Not So Positive
The unemployment rate in the Czech Republic remains very low. On the other hand, the overall economic outlook is rather daunting, especially due to the high level of inflation and steep rise in the prices of energy. Photo: KK
The Czech labour market has been steadily growing in the past few years, and this trend is expected to continue into the second half of 2023. Recent reports from the Ministry of Labour show that unemployment rates have dropped significantly since 2019, with an average rate of 3% across all sectors as of June 2021, indicating a healthy job market where employers are willing to hire new employees at competitive wages.
Additionally, salaries have also increased over time due to rising demand for skilled workers across various industries, including technology and finance. The IT industry is particularly strong in the country, as well as manufacturing and automotive engineering. Healthcare workers are in high demand due to the ageing population of the Czech Republic, while finance jobs are also plentiful.
The government has taken several actions over recent years which further support employment prospects within the country; these include tax incentives for businesses who create new jobs as well providing grants and subsidies towards training programs related to digital skills or green technologies.
On the other hand, the Czech economy is facing a number of challenges in 2023, including a slowing growth rate and rising inflation. According to Deloitte’s economic forecast for 2023, Czech GDP could fall by 1.1% in 2023, mainly due to high energy prices and inflation. The Czech government has struggled to reduce public debt while trying to maintain fiscal discipline and stimulate economic activity. These issues have had an impact on consumer confidence as well as business investment plans for the year ahead. To address these problems effectively, it is essential that policymakers focus on improving macroeconomic fundamentals, such as increasing domestic demand through structural reforms and targeted fiscal policies while maintaining financial stability over the medium term.
The average wage is expected to increase by 4.6% in 2023, but due to higher inflation, real wages should decrease by 3.7% in 2023. The same was the case last year, when, according to estimates, the average wage rose by 5.7%, but in reality it fell by 8.2%.