Some Statistical and Analytical Notes on the Nature of the 2020–2021 Crisis

The present work is based on a hypothesis that the Czech economy was showing signs of economic deceleration and a potential slump into deeper growth problems way before the outbreak of the COVID-19 pandemic, i.e., at least in the year 2019. However, the present text does not intend to thoroughly confirm this hypothesis because in order to do so, a longer timeline of key economic indicators needs to be analysed. What it does present is at least a partial argumentation supporting the abovementioned hypothesis and some basic calculations. It proposes two ways towards its confirmation. The first one is a comparative analysis of individual - especially European - economies' response to subsiding external influences, i.e., to the weakening of the effects of the pandemic on the economy. The second way is at least a partial analysis of key macroeconomic indicators from the time before and during the pandemic, with an emphasis on detectable divergences in the development. The conclusion of our research is the finding that as early as in 2019, the Czech economy was showing signs of imminent deceleration of growth, which would probably have turned into stagnation and possibly a certain decrease in economic activity. The conclusions indicate that the reason behind such development was a massive but in fact little effective investment activity in the Czech economic environment, which is historically related to the structure of the economy and to the position of the Czech industrial sector in supplier relationships. Two related phenomena arise from that: firstly, a relatively low labour productivity, with producers domiciled in the Czech Republic reaching quite a low volume of value added, and secondly a massive capital outflow in the form of profits paid to parent companies abroad. The final part of the paper outlines some potentially effective steps which might lead - under favourable circumstances - to restructuring processes in the Czech economy. Due to the date of finishing the research, the paper does not include the consequences of the War in Ukraine.

Keywords: COVID-19, economy crises, GDP, economic growth, ICOR, investment