AmCham annual Macroeconomic Outlook: More return on Government spending needed

AmCham held its annual Macroeconomic Outlook with Czech National Bank Vice-Governor Eva Zamrazilová, and with featured topic experts Eric Heymann, Senior Economist at Deutsche Bank and Ondřej Zabloudil, Director, Financial Advisory, Real Estate and Construction at Deloitte. 

Both the Vice-Governor Eva Zamrazilová and AmCham President Milan Šlapák of RSBC Group emphasized the need to generate more public return on government spending (particularly spending made possible by debt). Government indebtedness should not be taken as the key determinant of efffective governance: the return generated on that debt is a better measure. 

Eric Heymann of Deutsche Bank reported that Germany expects to sell about 80% of the cars they used to make. China, he posits, has built some advantages in the new electric car technologies that will be difficult to overcome. This raises two questions: 1) is the Czech car industry fighting to hold on to today's technology at the price of being irrelevant in tomorrow's and 2) what other industries can replace that economic output.

Ondřej Zabloudil of Deloitte showed how the economy and populations are shifting to cities. For the government to manage this change successfully, they need to plan highways, public transport, schools, and housing well. For that they need precise data. That is what a digital construction permit coordinated across every region of the country can provide. Having thousands of permit authorities instead of hundreds (as in other EU countries) means there are many local kings who will resist any attempt to change how they run things. Failure to overcome this resistance may seriously damage Czechia's ability to compete. 

Thank you to members and guests for joining our annual macroeconomics intel session and sharing insights.

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