CZECH REPUBLIC

Strong fundamentals help to mitigate the impact of Covid-19

A2

MEDIUM RISK for entreprise

  • Economic risk

  • Business environment risk

  • Political risk

  • Commercial risk

  • Financing risk

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GDP USD244bn (World ranking 46, World Bank 2018)
Population 10.63mn (World ranking 86, World Bank 2018)
Form of state Parliamentary Democracy
Head of government Andrej Babiš (PM)
Next elections 2020, legislative (Senate)
  • EU membership and good international relations
  • High income economy with fairly strong underlying macroeconomic fundamentals
  • Solid monetary policy
  • Favorable public finances
  • Manageable external debt burden
  • Sound banking sector that has proven resilient to adverse shocks
  • Favorable business environment
  • History of fragile coalition governments, resulting in often ineffective policymaking and slow reform progress
  • High export dependence and unfavorable export structure

Trade structure by destination/origin

(% of total)

Exports Rank Imports
Germany 28%
1
28% Germany
Slovakia 10%
2
12% China
Poland 6%
3
9% Poland
United Kingdom 5%
4
7% Slovakia
France 4%
5
5% Netherlands

Trade structure by product

(% of total)

Exports Rank Imports
Cars And Cycles 11%
1
8% Computer Equipment
Vehicles Components 8%
2
7% Electrical Apparatus
Electrical Apparatus 8%
3
6% Telecommunication Equipment
Engines 6%
4
5% Vehicles Components
Computer Equipment 6%
5
5% Engines
The payment culture of domestic companies is generally good but when it comes to settling bills some delays can be expected.

  • Low

  • Medium

  • Sensitive

  • High

  • Payments

  • Court proceedings

  • Insolvency proceedings

The court system is complex and is criticized for a lack of transparency and independence. In addition, legal proceedings tend to be overly lengthy and costly while enforcing court decisions may also be problematic.

When the debtor has become insolvent, debt-renegotiation mechanisms are inefficient and liquidation is the default procedure so that the chances of collecting the debt are extremely poor.

Contact Euler Hermes

Economic Research Team

research@eulerhermes.com

Country Risk Analyst:

Manfred Stamer

manfred.stamer@eulerhermes.com      

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