The Czech Republic maintained solid economic growth of two per cent of GDP in the second quarter of this year. Karel Havlíček, First Deputy Prime Minister, Minister of Industry and Trade and First Vice-Chair of the ANO movement, appreciates this, but at the same time says that we cannot be satisfied with it. And he immediately lists how this result can be improved further, which areas are key and how the government can help.
So what is behind the economic growth, and to what extent are the effects of US President Donald Trump’s tariff measures complicating the situation?
Two per cent is a solid result, but it is not a pace we should be satisfied with. In the second quarter, growth was driven primarily by household consumption, foreign demand and industry, while services also performed well. Households are being helped by rising real incomes and lower inflation. Investment, on the other hand, acted as a drag on quarter-on-quarter growth. US tariffs are not helping the situation, but their direct impact on the Czech economy is not decisive. The indirect impact through Germany, the automotive industry and our subcontractors is considerably greater. I do not consider tariffs a good tool and I do not want a trade war or an automatic spiral of retaliation. Europe must negotiate hard, open up additional markets and help Czech exporters diversify. The risk amounts to tenths of a percentage point of growth, not an economic collapse.
You yourself have spoken about the intention to accelerate the pace of Czech economic growth in the coming years. Where do you see the sources of this growth and what can the government do to achieve it?
The private sector, businesses and research must be the driving force, not a state handing out subsidies. The government should create a predictable environment – more affordable energy, faster permitting, high-quality transport and digital infrastructure, enough workers and less regulation. We want to move from an economy of cheap subcontracting to higher added value. The key areas are automation, robotics, artificial intelligence, nuclear energy, the defence and space industries, chips, biotechnology and linking research with companies. Accelerated depreciation should be our flagship measure, encouraging businesses to invest in machinery, energy savings and productivity. Alongside this, we need a functioning capital market, employee shares, better protection of intellectual property and a state that makes decisions quickly.
Speaker of the Chamber of Deputies Tomio Okamura has already visited China, and you and the prime minister are planning to go there as well. In the past, China made many promises, but few of its planned investments in the Czech Republic materialised. What do you want to negotiate and where do you want to direct Chinese investment?
There is no point going to China for a photograph or a general memorandum. The prime minister’s trip and mine will take place in the spring of next year only there is a concrete outcome prepared in advance. We want to restore direct air links, make travel easier, improve Czech companies’ access to the Chinese market and attract genuine investment. We have learned from the past – we do not want purchases of hotels, real estate or established Czech brands without further development. We are interested in new manufacturing and technology projects involving research, skilled jobs and Czech suppliers. Every investment, however, must undergo a security review; we will not put critical infrastructure and strategic data at risk. We will measure results by projects actually implemented, not by billions promised.
Should the Czech Republic maintain its existing model of intensive economic cooperation with Taiwan alongside China?
Yes. Taiwan is an important technology and investment partner, particularly in semiconductors, electronics, research and university cooperation. It would be a mistake to weaken these relations. At the same time, we respect the One China policy, and I maintain that it is possible to have very good economic relations with Taiwan as well as rational relations with China. Economic cooperation should continue at the level of ministries, companies, scientists and schools. We do not have to turn every trade mission into a high-profile political gesture by the highest constitutional officials. Czech foreign policy should be self-confident, pragmatic and focused on concrete results.
At the end of July, you signed a memorandum with Rolls-Royce SMR on preparations for small reactors. When and where should they be built, and should they replace some coal-fired power plants and heating plants?
We are planning the first small modular reactor at Temelín in the second half of the 2030s. The memorandum opens the way for preparations at other sites, primarily Tušimice and Dětmarovice, with the government due to decide on the timetable for additional units in 2028. The aim is to build up to six Rolls-Royce SMR units with a total capacity of around three gigawatts. Yes, the sites of today’s coal-fired power plants are a logical choice – they have grid connections, industrial facilities and workers, and modular reactors there can supply heat to surrounding towns in addition to electricity. But SMRs are not the only replacement for coal. They will complement large nuclear units, renewable sources and transitional gas-fired generation. The highest possible participation of Czech industry in the supply chain is also crucial.
After several decades of hesitation, a decision has been made to complete the weir on the Elbe near Děčín. What benefits do you expect this to bring to the Czech economy? And is the northern shipping route from Szczecin along the Oder to Ostrava also under consideration?
The Děčín navigation stage is intended to remove the last critical bottleneck on the Czech Elbe waterway. It should increase the reliability of navigation from the current roughly one hundred days, shift some heavy and oversized cargo from roads to waterways, and support ports, exporters and logistics for major energy projects. It should include a hydroelectric power plant and environmental compensation measures; the project will not proceed without a proper EIA. At the same time, we must negotiate with Germany, because the Czech weir alone will not guarantee a year-round route to Hamburg. I consider the Oder route from Szczecin to Ostrava a project worth examining jointly with Poland, particularly for heavy industry and the Moravian-Silesian Region. However, this is not about reviving the entire Danube–Oder–Elbe Canal. The deciding factors will be economics, water, the environment and the commitment of the Polish side.
The Czech economy is performing significantly better than Slovakia’s. How serious a problem is Slovakia falling behind the Czech Republic, and is Slovakia dragging us down economically? Conversely, is Poland’s successful economic development helping us?
Slovakia is not dragging our economy into recession, but our economies are exceptionally interconnected – we share supply chains, energy systems and the automotive industry, so stagnating Slovak demand affects some Czech companies. The answer is not to lecture Bratislava, but to pursue practical cooperation in energy, infrastructure and a common approach within the EU. Polish growth, on the other hand, is helping us: Poland is a large and increasingly wealthy market, it is investing in infrastructure, defence and energy, and creating contracts for Czech companies. At the same time, it is an increasingly strong competitor for capital and people. Successful Poland is both an opportunity and an incentive for us not to fall behind.
There is talk of savings in education. On the other hand, thousands of students from Slovakia study at Czech universities free of charge. Is this long-established system ultimately a plus or a minus for the Czech economy?
Overall, I consider it a plus. Slovak students quickly fit in, both linguistically and culturally, they spend money and work here during their studies, and a significant proportion remain after graduation to work in Czech companies, hospitals or research. We gain young, qualified people at a time when demographics are not in our favour. But we must not overlook the costs, particularly in expensive fields of study, or the shortage of places for Czech applicants. In my view, the solution is not blanket tuition fees based on nationality. We need to fund universities according to quality and the needs of the economy, expand capacity in medicine and technical fields, and create conditions for graduates to work in the Czech Republic after completing their studies. Savings should be made by eliminating inefficiency, not in education that generates future growth.
The author is a European editor of Deník
CV BOX
Karel Havlíček (born 16 August 1969 in České Budějovice) is First Deputy Prime Minister, Minister of Industry and Trade and First Vice-Chair of the ANO movement.
He studied civil engineering at the Czech Technical University in Prague, earning an engineering degree, and later obtained an MBA from the PIBS at Manchester Metropolitan University in 1998. He completed his doctoral studies in economics and management at the University of Economics in Prague in 2004 and was appointed associate professor in 2014.
He served as Chairman of the Board of the Association of Small and Medium-Sized Enterprises and Crafts of the Czech Republic. He was also a member of the Government Council for Research, Development and Innovation.
In 2019, he was appointed Minister of Industry and Trade. A year later, he also took on the role of Minister of Transport.
He joined the ANO movement in 2021. In February 2023, he was elected First Vice-Chair. In the same month, he was also elected Deputy Speaker of the Chamber of Deputies.
Following the 2025 elections, he again became Minister of Industry and Trade and Deputy Prime Minister.
He is married and has two children. He speaks English, German, Russian, and partially Spanish, French, and Chinese.
THE PHILIPPINES
The Czech Republic is recruiting workers from the Philippines on a large scale. Why there in particular, and are other countries also being considered? “The Philippines has a long tradition of working abroad, a functioning selection system, and many English-speaking and professionally trained people, for example for industry, logistics, healthcare and care services,” Karel Havlíček explains. “This is not about cheap labour – they must receive Czech wages for Czech work and must not become prey to unscrupulous agencies. The main problem today is not quotas, but waiting times of 90 to 150 days. Through digitalisation, we want to shorten the process ideally to 30 days. In addition to the Philippines, we are focusing on India, Indonesia, Mongolia, Moldova, Georgia, Kazakhstan, Armenia, Serbia and North Macedonia, always according to the specific demand from companies. The priority remains automation, employing local people and retaining Ukrainians or Slovaks who are already here; managed migration should fill genuine gaps, not push wages down.”
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