Analysis: The standard of living of Czechs has approached the level of Western Europe

Prague – The standard of living of Czechs has approached the level of Western Europe over the last two decades. Last year, the gross domestic product per capita (GDP) in purchasing power parity reached 91 percent of the European average, whereas at the time of entry it was 80 percent. This is based on an economic analysis recently presented to journalists by Česká spořitelna. However, the authors noted that some regions such as the Karlovy Vary and Ústí nad Labem regions are diverging. The standard of living in the South Moravian Region has increased the most among Czech regions. Some countries that, like the Czech Republic, joined the EU in 2004, have grown faster. Poland’s standard of living has risen from 50 percent to 80 percent, and Lithuania from 43 to 90 percent of the EU average.

The real gross domestic product per capita in the Czech Republic has increased by 40 percent from 249,000 CZK in 2004 to 675,000 CZK in 2023 since joining the European Union. Household consumption has increased from 150,000 CZK to 302,000 CZK during this period, according to the analysis. If the Czech Republic were not part of the EU, the country would fare economically worse, according to the analysis. GDP per capita for last year would have been a fifth lower, by 130,000 CZK. Household consumption would have decreased by a third, that is by 100,000 CZK.

From the EU budget, the Czech Republic on average gains 100 to 150 billion CZK annually, while contributions to the EU budget reach 50 to 70 billion CZK. Every year, the Czech Republic has approximately 70 billion CZK available thanks to the EU budget, which is more than the annual budget of most of our ministries. “Since 2004, we have gained over one trillion CZK from European funds. Two-thirds of these funds were used for cohesion policy purposes, i.e., for the development of individual regions. Approximately a quarter of the budget is directed towards the common agricultural policy, and the rest contributes to centrally managed programs, such as the program for science and innovation,” described analyst Petr Zahradník from the savings bank.

The Czech Republic has consistently had the lowest unemployment rate in the EU. Since its entry into the EU, it has decreased from six percent to under three percent, and since 2016 it has been the lowest in the entire EU. Due to rapid growth in recent years, the price level from 2004 to 2022 increased from 55 to 81 percent of the EU average. However, the wage level is still at 60 percent of the EU average.

Since joining the EU, the poverty rate in the Czech Republic has nearly halved, from twenty to around 11 percent. This is about 750,000 people. This positive development was contributed to by the drawing of European funds, particularly due to projects focused on the coordination of work in socially excluded localities, supporting social entrepreneurship, and increasing the capacity of services and social work, stated the ČS analysis.