The rate of absorption of EU structural funding added up to 17.9% of total at the end of September, according to figures of the regional development ministry. This is a visible improvement from end-June, when the absorption rate was only 13.0%. Furthermore, the rate of negotiated funds increased to 62.7% at end-September, higher by 5.1pps q/q.
However, there is still a threat that some programs may lose funding, since they near the 3-year deadline, within which they need to absorb the negotiated funding or lose it. The most striking examples are the Prague development program, where absorption is at a pitiful 5%, as well as the enterprise and innovation for competitiveness program, where absorption is only 7%. These seem unlikely to catch up in time for the end of the year, so there will be some allocation losses.
There are still hopes that Czech authorities can catch up and limit losses only to the 6% reserves included in the ESI allocations. However, we are skeptical that progress will be that quick, as there are personnel and skill shortages in the administration at the moment, which will not be compensated so quickly.