Czechs’ standard of living expected to improve as economy strengthens

Photo: Filip Jandourek

Economists are saying that the standard of living should improve for many Czechs based on the state of the economy, which is in surprisingly good shape. Numbers released by the country’s statistics office on Monday suggest there are several reasons to be optimistic.

Photo: Filip Jandourek
One indicator is the continued growth of Czech industry in the month of July, which improved by 8.6 percent year-on-year. Others factors include a rise in exports and the trade balance finished with a 11.5 billion crown surplus, as well as fairly low unemployment figures (less than 7.5 percent) and jobs growth. Analyst Petr Dufek of ČSOB bank spoke to Czech Radio’s flagship station Radiožurnál:

“The economy is doing well, new jobs are being created. Positive developments will, without a doubt, have a positive impact on living standards in the Czech Republic.”

The analyst points to low inflation, lower prices for electricity and natural gas as additional factors, and an expected rise in real wages by the end of the year. The bank’s Petr Dufek again:

“I expect by the end of this year that real wages will improve in the Czech economy… that we will see a slight improvement in the standard of living among almost all inhabitants.”

Continued growth in industry in the Czech Republic, Czech Radio reports, comes at a time when economies in western European countries are beginning to see setbacks. An analyst for Česká spořitelna, Jan Šedina, told Radiožurnál that a weakening of industry in neighbouring Germany had not had an impact on the Czechs industrial sector, buoyed primarily by car manufacture. Car producers in the Czech Republic, he said, were enjoying strong demand from abroad. The industrial sector has also seen demand for electronic, rubber and plastic products –so further growth in industry is expected.

Economists point out that new jobs have become available as unemployment stagnates; in the coming months, unemployment in the Czech Republic is still expected to drop somewhat. While the additional drop is not likely to be great, the overall average for 2014, analysts suggest, will be lower than in 2013.