200,000 Czechs could slip into poverty amid the coronavirus crisis

The Covid epidemic could push another 200,000 poor and socially excluded Czechs into real poverty, the Czech Agency for Social Inclusion (ASZ) told journalists on Thursday.

Prior to the onset of the pandemic, the Czech Statistical Office (ČSÚ) reported that 9.5 percent of the Czech population, or about one million people, was threatened with poverty.

The ASZ calculation was based on data on the growth in the GDP and the extent of poverty from previous years.

Last year, the GDP plummeted by 5.6 percent, the largest slump since the foundation of the Czech Republic in 1993. In previous years, it was on the rise.

"If the current relationship between the change in the GDP and the extent of poverty corresponds with the trend uncovered during the period of GDP growth, then one may expect the proportionate rise of the poor by 1-2 percent if the economy falls by 5 to 6 percent. In absolute numbers, this covers some 100,000 to 200,000 people," ASZ analyst Roman Matoušek said.

In the Czech Republic, the poverty threshold, which describes how many people do not reach the standard of living in the country is 60% of the national median earnings. Last year, the limit for an individual was CZK 13,640 per month. In the previous year, it was CZK 822 lower.

For two adults, the poverty threshold was CZK 20,460 a month. For a single parent with a small child, it was CZK 17,732, for two parents with two small children, it was CZK 28,644 and for parents with three children the poverty level is considered CZK 38,192.

Data collected by the ČSÚ last spring, reflected the state before the start of the epidemic. Year-on-year, the proportion of those below the poverty level fell from 10.1 to 9.5 percent.

The ASZ warns that along with a higher proportion of the poor, the costs of benefits in material need may surge, up to several tens of percent against the time just before the pandemic.

There is a growing number of unemployed and many self-employed have lost their businesses. The income of many households has also shrunk.

"According to our surveys in 2020, some 84 percent of the residents of socially excluded localities could not afford an unexpected expenditure of CZK 12,000. This year, that alarming situation can be expected to worsen even more," ASZ president David Benák said.

The pandemic has put an end to the positive trend from previous years, analyst Adam Duffek said.

"Those who were close to being able to find better forms of housing are ending up on the streets again. Prostitution is on the rise again, especially among the clients who worked in gambling houses and nightclubs before the pandemic," Duffek said.

"There is also a growing demand for the help services for drug addicts. There is an increasing number of those asking for food help among those who were previously able to make ends meet,“ he added.