Investment needs for digitalisation and climate change in Czech Republic: EIB

The survey highlighted that in the long term, COVID-19 will likely give rise to further investment needs in the Czech Republic, notably in the areas of service or product portfolio and the supply chain.

As part of a series of events organised to discuss current investment trends in the different EU Member States, the Czech Banking Association and the European Investment Bank, in partnership with the Confederation of Industry of the Czech Republic and the Institute for Democracy & Economic Analysis (IDEA), hosted the webinar "Investment and investment finance in the Czech Republic". It focused on investment needs and priorities for the Czech Republic in the era of COVID-19, digitalisation and climate change.

During the webinar, EIB Vice-President Lilyana Pavlova gave an overview of the EIB's activities in the Czech Republic and EIB Head of Economic Studies Pedro de Lima presented the results of the 2020 EIB Investment Survey for the Czech Republic.

The survey highlighted that in the long term, COVID-19 will likely give rise to further investment needs in the Czech Republic, notably in the areas of service or product portfolio and the supply chain.

EIB Vice-President Lilyana Pavlova said: "While the COVID-19 pandemic impacted investment in Czechia, the EIB, as the EU climate bank, is dedicated to helping the country through a digital and green recovery of the economy. Over the past five years, we have provided on average €900 million per year in new lending to the Czech public and private sectors and will continue to act as a key partner in the country."

EIB Head of Economic Studies Pedro de Lima added: "About half of Czech firms planned to cut their investment spending and a third expect the pandemic to have lasting effects. This calls for patient long-term investment support – to accelerate the recovery, safeguard jobs and adapt to the challenges of the green and digital transformation."

Zdenek Tůma, Member of the Czech Banking Association Presidium, and Chairman of the CSOB Supervisory Board said: "Czech banks' collaboration with the EIB Group is long-lasting, professional and mutually advantageous. It brings benefits to final recipients not only through competitive interest rates but, in the case of the European Investment Fund´s guarantees, it also helps banks to finance innovative SMEs that would otherwise be commercially risky as borrowers. And it not only helps new companies to enter markets, but it also supports them in an administratively friendly way, and it allows us to share with them the benefits of a pan-European triple-A creditor's funding."

Helena Horska, Chief Economist of the Raiffeisen Bank, said: "The Czech Republic's investment gap is roughly €22 billion for 2020-2023. Without stimulating private investment, we will not be able to close it. And investment needs to be smart to lay the foundations of growth."

The webinar was attended by business leaders, economists, policymakers and representatives from financial institutions and public sector partners, including Jan Dejl, Deputy Minister for the Ministry of Industry and Trade, Daniel Münich, Executive Director of the Institute for Democracy & Economic Analysis (IDEA) at CERGE-EI, Jitka Haubová, COO of Komercni Banka, Jan Švejnar, Professor of Global Political Economy at Columbia University and Adviser to the Czech Government, and Tomáš Kolář, CEO of Linet.

The EIB Investment Survey provides a clear picture of the challenges for firms in the EU. In addition to well-known investment barriers, such as skills shortages and aspects of the regulatory environment, firms need to deal with climate change and with the consequences of COVID-19. This translates into increased investment in innovation and digital technologies, and a rethink of the businesses' global value chains.

This is also true for firms in the Czech Republic. Over the coming years, most Czech firms intend to prioritise the development or the introduction of new products and services over capacity expansion and replacement. Just over half of firms have invested or are planning to invest to tackle the impact of climate change on their business. On average, firms dedicated about 10% of their investment spending to energy efficiency, similar to those in the rest of the EU.