The Czech Republic was exposed to the recent crisis through its export, but as it had no significant domestic imbalances the recession was relatively short, although the recovery is less dynamic than in other eastern European economies, according the OECD.

In its latest Economic Survey of the Czech Republic, the Organisation for Economic Co-operation and Development said that the country is exposed to further risks from the international slowdown and sovereign debt crises. It advised the government to continue a broad based reform programme to enhance economic growth and make it more robust to economic shocks.

The Czech pension system is keeping old age poverty low, but is not very diversified, the OECD said. The report said: “The introduction of a new voluntary defined contribution pillar (‘second pillar’) is a step in the right direction, which needs to be well communicated and accompanied by regulatory measures to allow the public to make informed choices. In particular, consideration should be given to establishing a central clearing house in order to keep fees low. Payouts in the form of annuities and life-cycle investment strategies should be the default options.”

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