Bloomberg: Living standards in Czechia will soon surpass Spain, Italy

Czechia's impressively rising GDP per capita at purchasing power parity should see it overtake the Mediterranean countries by the end of the decade.

Thomas Smith

Written by Thomas Smith Published on 09.05.2024 10:09:00 (updated on 09.05.2024) Reading time: 2 minutes

A report from financial company Bloomberg has found that parts of Central and Eastern Europe (CEE) – including Czechia – will overtake living standards in Mediterranean countries in the coming years.

Using GDP per capita at purchasing power parity (PPP), Bloomberg calculated that Czechia is close to catching up with the likes of Italy and Spain, whose GDP per capita at PPP is USD 56,905 (CZK 1.3 million) and USD 52,012 respectively. Czechia’s current rate is USD 50,475. 

Already better than other Mediterranean states

Notably, Czechia is already more developed than Portugal and Greece in terms of GDP per capita, with both South European nations posting a rate of about USD 47,000 and USD 41,000, respectively. Bloomberg predicts that Czechia – as well as neighboring Poland, close-by Slovenia, and Baltic Lithuania – will have higher living standards and be “richer” than Spain by the end of the decade. They should be very close to the level of Italy by 2029. In comparison, Germany has a far higher GDP per capita, at around USD 67,000.

According to Bloomberg, access to the EU common market and foreign investment have hugely helped CEE countries catch up with Western European levels in recent decades.

The financial site also points out that the enrichment of CEE countries simultaneously leads to more movement and fluidity – perhaps uncertainty – on the job market as workers are frequently on the lookout for higher-paying jobs. Bloomberg also points out that Italy and Spain’s recently faltering economies have helped Czechia and other CEE countries catch up with the southern European states.

Prague developing especially well

A separate study from Eurostat also underlines the positive growth of Czechia's economy: Prague is the fourth-richest region in the EU, based on GDP per capita levels at PPP. In 2019, Eurostat data showed that Prague was the EU’s third-richest region. Compared to Warsaw and Paris, Prague exhibits significantly stronger economic performance, boasting a 25 percent higher GDP per capita. Furthermore, Berlin’s GDP per capita is just 60 percent of Prague’s.

However, chief economist at Creditas Bank Petr Dufek told Czech media outlet earlier this year that GDP per inhabitant does not fully indicate what the standard of living is in a given region: that is, whether the rise in the standard of living or the profitability of companies contributes to the increase in a country’s GDP. 

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