Czechia still lags behind EU average despite rising wages

Czech incomes have surpassed that of Portugal and Greece, but are still one-third lower than EU average due to purchasing power and high inflation. Staff

Written by Staff Published on 04.03.2024 10:28:00 (updated on 04.03.2024) Reading time: 2 minutes

In recent years, Czechia has seen a significant increase in average net annual income and a steady rise in price levels. According to data from Eurostat, the country’s income levels have risen to two-thirds of the European average, overtaking Portugal and Greece from the older EU countries.

The Czech public’s average income level marks a significant improvement from when the country joined the EU in 2004 when income levels were at only one-third of the EU average. However, despite this growth, the purchasing power of the Czech population is around the 10th-weakest in the bloc, mainly due to recent high inflation.

Higher salaries help income jump

According to Eurostat data, the average net annual income in 2005 in Czechia was CZK 154,292, equivalent to EUR 4,838 or one-third of the EU average. In sharp contrast, the 2022 median annual income in the Czech Republic was CZK 347,193. Rising salaries aid this rise. Czechia currently has an average gross monthly wage of over CZK 42,500 – in 2016, this figure stood at just CZK 27,600. 

In 2016, the Czechs overtook Greece in terms of income, and in 2022, Czechia ranked higher than Portugal. Among the inhabitants of post-communist states, Slovenia and Estonia are the only better-off countries. Czechia’s current GDP per capita is average relative to all EU countries.

Purchasing power still very limited

Due to soaring living costs, purchasing power remains an issue in Czechia, especially in the past two years. Last year, people from the Czech Republic could buy less than two-thirds of what Germans and three-fifths of what Austrians could for an average net income per person.

Despite nominally increasing salaries, wages in the last eight quarters have fallen in real terms every quarter. In 2022, Czechs experienced a staggering 8.5 percent plunge in real earnings. However, better times should be ahead, with real wages expected to increase slightly in 2024.

Tying in with rising living costs, the Czech Republic has also seen a steady rise in price levels, reaching 84 percent of the EU average in 2022. In contrast, 2014 average prices were just 64 percent of the EU average.

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