cs flag go to the original language article
This article has been translated by Artificial Intelligence (AI). The news agency is not responsible for the content of the translated article. The original was published by CTK.

Index: Czech Republic has the ninth most developed economy in the EU, improved by five places

by AI | 11.Feb 2025 | Europe in brief AI

The reduction in inflation, the growing share of national income in GDP, or the stabilization of public debt helped her into the top ten.

A steelworker cleans a settling channel at a blast furnace. Photo: Hauke-Christian Dittrich/dpa

Prague – The Czech Republic has the ninth most developed economy out of the 27 states of the European Union, having improved by five places year-on-year. A reduction in inflation, an increasing share of national income in GDP, and the stabilization of public debt helped it reach the top ten. The Czech economy is in better shape than Finland, Belgium, or Italy, and has returned to the level it was in 2022. On the contrary, the obstacles to economic growth in the Czech Republic are the economic weakening of households and the low added value of labor. This is according to the Prosperity and Financial Health Index, published by Česká spořitelna in collaboration with the Europe in Data platform. Their representatives presented it to journalists.

According to the index, the improvement of the Czech position in the ranking among European states was mainly due to a reduction in inflation. While in 2023 it exceeded 15 percent, last year it averaged 2.7 percent, seven-tenths above the target of the Czech National Bank. It was the ninth smallest deviation from this value within the EU. Another boost was provided by the increase in the share of national income in GDP, which is long one of the lowest in the EU. This indicator expresses how much of the earned money remains with the citizens. In 2022 it was 95 percent, while a year later it rose to 99 percent, indicating a significant shift from the 22nd to the 13th position in the EU.

According to the index, last year in the Czech Republic also managed to mitigate the outflow of capital abroad and some Czech companies are thus returning to the homeland. According to the data, the Czech Republic is also among the third of the least indebted countries in the EU. In 2023, the national debt in the Czech Republic exceeded three trillion crowns, but thanks to the growth in the nominal performance of the economy, the relative indebtedness of the Czech Republic decreased, hovering around 42 percent of GDP. The Eurozone average of national debt to GDP is almost double. For instance, in Greece, the ratio is nearly 170 percent.

Conversely, according to the index, the Czech Republic has the third-lowest share of gross added value in total production in the EU. Similarly low is the added value of exports, with the Czech Republic among the seven worst countries in the group of 27. According to Česká spořitelna and Europe in Data, this means that the domestic economy is still primarily dependent on assembly work and lacks a stronger representation of its own innovations, technologies, and know-how. For the Czech Republic, a fundamental step would be moving from a sub-supplier economy to the production of final products with higher added value.

According to the Index, the best economy in Europe is Sweden, followed by Germany, Denmark, and Austria. On the opposite end of the ranking is Greece, followed by Poland. Neighboring Slovakia ranked 24th. (February 11)