TOWARDS MORE SUSTAINABLE AND INCLUSIVE GROWTH 2018 OECD ECONOMIC SURVEY OF THE CZECH REPUBLIC & ENVIRONMENTAL PERFORMANCE REVIEW 2018 Prague, July 16th 2018 http://www.oecd.org/eco/surveys/economic-survey-czech-republic.htm
@OECDeconomy @OECD
The economy is thriving Real GDP growth, year on year per cent changes 8
Czech Republic
8
OECD
6
6
4
4
2
2
0
0
-2
-2
-4
-4
-6
2007
2008
2009
2010
2011
2012
2013
2014
2015
Source: OECD (2018), OECD Economic Outlook: Statistics and Projections (database).
2016
2017
2018
2019
-6 2
Unemployment is at a record low Unemployment rate, % of labour force 8
8
7
7
6
6
5
5
4
4
3
3
2
2
1
1
0
2010
2011
2012
2013
Source: OECD Quarterly National Accounts (database).
2014
2015
2016
2017
2018
0
3
The exchange rate is appreciating and inflation is around the target Exchange rate (left axis)
Headline inflation (right axis) Y-o-y % changes
CZK/EUR 28.0
3.0
27.5
2.5
27.0
2.0
26.5
1.5
26.0
1.0
25.5
0.5
25.0
2013
2014
2015
2016
2017
Source: OECD (2018), OECD Economic outlook (database) and Thomson Reuters Datastream (database).
2018
0.0
4
Well-being is higher than in other Central and Eastern European countries OECD Better Life Index, 2017 Index scale 0 (worst) to 10 (best) Czech Republic
OECD CEE peers
Income and wealth 10
Subjective well-being
8
Jobs and earnings
6
Personal security
4
Housing
2 0
Environmental quality
Work and life balance
Civic engagement and governance Social connections
Health status Education and skills
Note: For each dimension indicators are normalised and averaged. CEE peers are Estonia, Hungary, Poland, the Slovak Republic and Slovenia. Source: OECD (2017), OECD Better Life Index, www.oecdbetterlifeindex.org.
5
Poverty is low Population with disposable income below the poverty line, % of population, 2015 30
25
25
20
20
15
15
10
10
5
5
0
0
CZE ISL DNK SVK FIN NOR FRA AUT NLD SVN LUX DEU HUN CHE SWE IRL BEL GBR POL OECD PRT KOR NZL ITA AUS GRC CAN JPN EST ESP LVA CHL USA MEX TUR ISR
30
Note: The poverty line is 60% of median household income. Household income is adjusted to take into account household size. Source: OECD (2018), OECD Social and Welfare Statistics (database).
6
CHALLENGES TO SUSTAINABLE GROWTH
7
Wages are rising due to labour market shortages Thousands
CZK
Vacancies registered at the employment offices (left axis)
300
35 000
Average monthly wages of employees (FTE) (right axis)
30 000
250
25 000
200
20 000 150 15 000 100
10 000
50
0
5 000
2010
2011
2012
2013
2014
2015
2016
2017
2018
Note: 2017-preliminary; vacancies refer to numbers registered at the end of the respective year and for 2018 at the end of the first quarter, preliminary. Source: Czech Statistical Office, Public Database.
0
8
Productivity is picking up but remains low Real GDP per person employed, growth and level Y-o-y % change 7
CZE, growth (lhs) CZE, level (rhs)
OECD, growth (lhs) OECD, level (rhs)
Thousand USD PPP 90
6
80
5
70
4 60
3 2
50
1
40
0
30
-1 20
-2
10
-3 -4
0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Source: OECD (2018), OECD Productivity (database).
9
Reconciling work and family remains difficult for mothers of young children Employment gap of mothers with young children with respect to men aged 25-54, %, 2015
70
60
60
50
50
40
40
30
30
20
20
10
10
0
0
DNK SWE PRT SVN NOR ISR AUT LVA FIN BEL CAN NLD FRA ISL CHE LUX ESP POL USA DEU OECD IRL EST GBR AUS GRC NZL ITA JPN HUN SVK CZE CHL KOR MEX TUR
70
Note: Mothers with young children refer to working-age mothers with at least one child aged 0 to 14 years. The employment gap is the difference between the employment rate of men (aged 25-54 years) and that of young mothers, expressed as a percentage of the employment rate of men. Source: OECD (2017), Employment Outlook 2017.
10
The population is ageing Percentage of population aged 65 years and over 2050
2015 40
35
35
30
30
25
25
20
20
15
15
10
10
5
5
0
0
ISR MEX TUR USA AUS LUX NZL NOR CHL DNK SWE ISL GBR IRL CAN FIN BEL FRA OECD LVA NLD HUN SVK CHE EST CZE AUT DEU POL SVN ITA KOR GRC PRT ESP JPN
40
Source: OECD (2017), Health at a Glance 2017: OECD Indicators.
11
Fiscal revenues rely heavily on social contributions 2016 or latest, % of GDP 50
Social Security Contribution
Other direct taxes
Indirect taxes
50
45
45
40
40
35
35
30
30
25
25
20
20
15
15
10
10
5
5
0
MEX CHL USA NZL SVK ESP POL CZE OECD PRT EST SVN DEU HUN AUT FRA DNK
Source: OECD (2017), Revenue Statistics (database).
0
12
Ageing-related spending will increase Change in gross public expenditure between 2016 and 2070, percentage points of GDP Pensions
Health care and long-term care
Other
8
8
6
6
4
4
2
2
0
0
-2
-2
-4
-4
-6
FRA
LVA
ITA
DNK POL SWE EU28 HUN SVK
NLD AUT DEU
BEL
CZE NOR SVN
Source: European Commission (2018), “The 2018 Ageing Report: Economic and Budgetary Projections for the EU Member States (2016-2070)”. Based on the reference scenario.
-6
13
Key recommendations Addressing labour shortages •
Increase resources to education, skilling, reskilling and upskilling.
•
Keep expanding the supply of affordable childcare facilities.
•
Increase the flexibility of jobs by better enforcement of rights to part-time work, flexible teleworking and shared jobs.
Tackling long run challenges, including the impact of an ageing society •
Keep some fiscal space to cope with future ageing-related spending.
•
Rebalance tax revenues by reducing social security contributions and raising indirect taxes (VAT through better compliance and environmental taxes).
•
Link tightly retirement age to life expectancy. Broaden the financing of health care and long-term care by expanding the base of contributions to all types of income.
More in the Key Policy Insights of the Economic Survey of Czech Republic 2018 and in Chapter 3 of the Environmental Performance Review
14
IMPROVING THE HEALTH CARE SYSTEM
15
Health outcomes have improved Life expectancy at birth in years, 2015 84
84
2005
Years gained during 2005-15
82 1.4
80
2.3 1.5
78
78
2.5 2.5
82 80
3.0
2.6
76
74
3.5
1.9
2.7
76
4.8
2.7
74
72
72
70
70
68
68
66
HUN
SVK
POL
EST
CZE
Source: OECD (2018), Health statistics (database).
CHL
OECD
SVN
GRC
PRT
ISR
ESP
66
16
Total health care expenditure is relatively low Total health care expenditure, 2016, % of GDP 20
18
18
16
16
14
14
12
12
10
10
8
8
6
6
4
4
2
2
0
0
TUR LVA MEX LUX POL EST SVK CZE ISR HUN KOR IRL GRC CHL SVN ISL ITA PRT ESP OECD NZL FIN AUS GBR AUT DNK BEL NOR NLD CAN JPN FRA SWE DEU CHE USA
20
Source: OECD (2017), Health at a Glance 2017: OECD Indicators, OECD Publishing, Paris.
17
Health spending will increase further as the population ages Drivers of health care expenditure, % of GDP Actual
10.0 9.5 9.0 8.5
10.0
Demographic scenario (ageing only) Expansion of morbidity Compression of morbidity Combination of non-demographic and demographic
9.5 9.0 8.5
8.0
8.0
7.5
7.5
7.0
7.0
6.5
6.5
6.0
6.0
5.5
5.5
5.0
2000 2005 2010
2015
2020 2025 2030 2035 2040 2045 2050 2055 2060 2065 2070
Note: The projections do not anticipate future policy change. Health care expenditure includes long-term health care. Non-demographic factors include e.g. technological and institutional improvements. Source: Calculations based on data from OECD (2017), System of Health Accounts (database) and European Commission (2018), Population projections from the Ageing Working Group by Eurostat.
5.0
18
The number of doctor consultations is high Consultations per inhabitant, 2015 or nearest year
Source: OECD (2017), Health Statistics (database).
KOR
JPN
HUN
SVK
CZE
DEU
TUR
NLD
CAN
ESP
POL
AUS
OECD
SVN
ITA
0
BEL
0
AUT
2
EST
2
FRA
4
LVA
4
ISL
6
LUX
6
IRL
8
DNK
8
NOR
10
FIN
10
PRT
12
CHE
12
NZL
14
CHL
14
SWE
16
MEX
16
19
Adverse lifestyle affects health Litres of alcohol per capita consumed 14
12
12
10
10
8
8
6
6
4
4
2
2
0
0
TUR ISR MEX NOR CHL JPN SWE GRC ISL ITA NLD CAN FIN USA NZL OECD KOR ESP DNK CHE GBR AUS PRT SVK EST POL LVA HUN IRL DEU LUX CZE SVN FRA AUT BEL
14
Source: OECD Health Statistics 2017
20
Health care is still too hospital centred Number of hospital beds per 1 000 inhabitants 14
12
12
10
10
8
8
6
6
4
4
2
2
0
0
MEX CHL SWE DNK CAN GBR TUR NZL USA ESP IRL ISR ISL ITA PRT NOR AUS NLD GRC FIN SVN CHE OECD LUX EST LVA SVK FRA BEL CZE POL HUN AUT DEU KOR JPN
14
Source: OECD (2017), OECD Health Statistics (database).
21
Ageing of doctors and health workers is threatening the supply of medical care Percentage of doctors aged 55 years and over in 2015 (or nearest year)
Source: OECD (2017), Health at a Glance 2017.
GBR
KOR
IRL
NOR
NLD
AUS
FIN
SVN
NZL
CHL
ESP
AUT
CAN
SWE
CHE
OECD
USA
JPN
0
SVK
0
CZE
10
DNK
10
HUN
20
LUX
20
ISL
30
DEU
30
BEL
40
LVA
40
FRA
50
EST
50
ISR
60
ITA
60
22
Key recommendations for improving the health care system •
Gradually introduce a pay-for-performance scheme for hospitals and doctors based on a broad set of performance indicators.
•
Reduce the scope of the reimbursement decree by limiting its coverage and leave room for negotiations between insurance funds and health providers
•
Align payment schemes for long-term care in health and social care setting by coordinating the use of user fees.
•
Continue reducing hospital beds by encouraging regions and municipalities to restructure capacities of health services and facilities
•
Strengthen the role of primary care through gate-keeping and further shift towards a better mix of capitation fees and fee-for-service for General Practitioners.
•
Increase the capacity of medical faculties and the number of students through scholarships and ensure the sustainable financing of universities.
•
Increase taxes on tobacco, alcohol and consider introducing taxes on unhealthy food and beverages.
•
Promote healthier lifestyles and further develop education, disease prevention and screening programmes. More in Chapter 1 of the Economic Survey of Czech Republic 2018
23
ENVIRONMENTAL PERFORMANCE REVIEW OF THE CZECH REPUBLIC Prague, July 16th 2018 http://oe.cd/epr-czech-republic
@OECD Environment @OECD
Good performance on some Sustainable Development Goals Czech performance compared with the OECD average, Distance to target (0 – target achieved) 0.0
Target
0.0 OECD Average
0.5
0.5
Cities
Inequality
Infrastructure
Energy
Economy
Prosperity
Note: This figure shows how far the Czech Republic must progress to meet the SDGs. Source: OECD (2017), "Measuring distance to the SDG targets: An assessment of where OECD countries stand".
Implementation
Planet
Institutions
People
Biodiversity
3.0
Oceans
3.0
Climate
2.5 Sustainable Production
2.5 Water
2.0
Gender Equality
2.0
Education
1.5
Health
1.5
Food
1.0
Poverty
1.0
Peace
Partnership 25
The Czech Republic has one of the most carbon intensive economies in the OECD CO2 emissions per unit of GDP, t/1000 USD 0.7
0.7
2015
2000 0.6
0.5
0.5
0.4
0.4
0.3
0.3
0.2
0.2
0.1
0.1
0.0
0.0
CHE SWE FRA NOR DNK IRL ISL LVA GBR ITA AUT ESP PRT LUX TUR HUN SVK NLD NZL BEL FIN DEU CHL SVN MEX ISR JPN OECD GRC USA POL CZE KOR AUS CAN EST
0.6
Notes: CO2 emissions from energy use only; excluding international marine and aviation bunkers; sectoral approach. GDP at 2010 prices and purchasing power parities. Source: IEA (2017), IEA CO2 Emissions from Fuel Combustion Statistics (database).
26
A shift from coal to nuclear and renewables Electricity generation by source, GWh 100 000
100 000
90 000
90 000 Renewables and waste
80 000 Nuclear
80 000
Natural gas
70 000
Natural gas
60 000
50 000
70 000 60 000
Coal and coal products
50 000
40 000
40 000
30 000
30 000
20 000
4th lowest OECD share
20 000
Nuclear
10 000 0
10 000
Coal
0
Source: IEA (2017), IEA World Energy Statistics and Balances (database). 27
Achieving mid and long-term climate targets will require additional efforts Greenhouse gas emissions, Mt CO2eq Total GHG emissions
Targets
Kyoto Protocol target
200
200
180
180
160
160
140
140
120
120
100
100
80
80
60
60
40
40
20
20
0 1990
1995
2000
2005
2010
2015
2020
2025
2030
2035
2040
Note: Total greenhouse gas emissions excluding LULUCF. Source: OECD(2017),"Air and climate: Greenhouse gas emissions by source", OECD Environment Statistics(database); MOE (2017), Climate Protection Policy.
2045
2050
0
28
Carbon prices are low Average effective tax rates on CO2 from energy and carbon intensity, 2015
Average effective tax rates (EUR/t CO2)
120
120
CHE
Nuclear 90
90
Natural gas 60
60
Oil
SWE CZE
30
30
KOR
POL
AUS
EST
CAN
USA 0
0
0.05
0.1
0.15
0.2
0.25
0.3
0.35
0.4
Coal 0.45
0
0.5
Carbon intensity of GDP (kg CO2 per 2010 USD at PPP) Note: The average effective tax rate is the price of carbon emissions resulting from excise taxes (it translates excise taxes on energy into rates per unit of CO2 emissions from energy use). Source: OECD (2018), Taxing Energy Use 2018: Companion to the Taxing Energy Use Database.
29
The rate of mortality from air pollution is among the highest in the OECD Number of premature deaths due to outdoor air pollution, per million habitants, 2016 1000
1000
900 800
800
700 600
600
500 400
400
300 200
200
0
NZL AUS SWE ISL MEX FIN CAN NOR IRL ISR CHE FRA CHL EST ESP LUX USA DNK KOR OECD TUR PRT JPN GBR NLD AUT SVN ITA BEL DEU GRC CZE SVK POL LVA HUN
100
Note: Data have been updated after the finalisation of the publication. Source: OECD (2018), OECD Environment Statistics (database).
0
30
Waste recovery is progressing but landfilling remains the main treatment method Municipal waste management, by type of treatment, 2015
100%
Landfill
Incineration without energy recovery
Incineration with energy recovery
Recycling and composting
Other treatment
100%
80%
80%
60%
60%
40%
40%
20%
20%
0%
0%
Notes: Data refer to the indicated year or to the latest available year. They may include provisional figures and estimates. Household and similar waste collected by or for municipalities, originating mainly from households and small businesses. Includes bulky waste and separate collection. For the specific country notes see the source database. Source: OECD (2017), "Municipal waste", OECD Environment Statistics (database); CZSO (2017) Generation, recovery and disposal of waste.
31
Car traffic volume is growing in Prague’s outer zone Passenger transport in Prague, 2006=100
Public transport
Outer zone road traffic volume
City centre road traffic volume 125
125
100
100
75
50
75
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
50
Note: Public transport: index based on the number of passengers transported; break in time series in 2014. Traffic volume: index based on the number of vehicles over the 24 hours of an average workday. City centre delineated at Petřín in the west, Letná in the north, Riegrovy sady in the east and Vyšehrad in the south (the Strahov and Mrázovka tunnels lie outside the central cordon). Outer zone: volume of traffic at the entrances of the main roads and motorways into the continually settled area of the city. Source: City of Prague (2006-17), Prague transport yearbook.
32
Key recommendations 1
Towards Green growth
•
Strengthen political commitment to a low-carbon economy and align the State Energy Policy with the Paris Agreement objectives
•
Introduce a carbon component in energy product taxation to reflect the climate costs of energy use outside the EU ETS
•
Increase the share of permits auctioned under the EU ETS and establish a stable support framework for renewables development
•
Tighten environmental criteria of vehicle taxes to promote fleet renewal towards cleaner vehicles and extend distance-based charging to address air pollution and congestion
33
Key recommendations 2
Improving waste management
•
Speed up the adoption of the new Waste Act
•
Harmonise the national waste management information system and official statistics on waste and materials
•
Review waste-related taxation in line with the waste hierarchy
•
Ensure that municipal waste fees cover the full costs of service provision
Promoting compact cities for sustainable development •
Use a functional rather than administrative approach in delimiting metropolitan areas
•
Adopt a compact, co-ordinated, connected urban development model
•
Link urban transport solutions to housing and land use planning to improve mobility and reduce air pollution
•
Promote the development of brownfield sites 34
For more information Disclaimers: The statistical data for Israel are supplied by and under the responsibility of the relevant Israeli authorities. The use of such data by the OECD is without prejudice to the status of the Golan Heights, East Jerusalem and Israeli settlements in the West Bank under the terms of international law. This document and any map included herein are without prejudice to the status of or sovereignty over any territory, to the delimitation of international frontiers and boundaries and to the name of any territory, city or area.
http://www.oecd.org/eco/surveys/economic-survey-czech-republic.htm http://oe.cd/epr-czech-republic 35