19/11/2023 20:35 | Monitoring
The Czech economy is still like a colander, says economist Lukáš Kovanda. The wealth of the Czech Republic disappears abroad in the form of dividends. At the same time, there is no balanced inflow of investment into the country. According to World Bank data, Czechs have less wealth than they actually create. Slovaks, Hungarians and Poles are better off.
Description: Economist Lukáš Kovanda
“Last year unequivocally confirmed the position of the Czech economy as a highly ‘draining’ economy,” wrote economist Lukáš Kovanda on the social network X, along with a note that the Czech Republic is among the first in the world ranking in terms of the extent of the outflow of wealth from the country. It disappears abroad. “The volume of created wealth, which is disappearing from the Czech Republic abroad without replacement, has been so significant in recent years that the country is unflatteringly at the top of the world rankings precisely according to the extent of the outflow of wealth.
The economist recalled that last year, the Czech Republic was the only country in which residents had less wealth than they had created. Data from the World Bank show that Czechs retained only 96 percent.
Percentages show the proportion of wealth that is actually available to the people of a country and the wealth that will be created in that country. Germany is at 110 percent and Austria at 108 percent in the table that Kovanda created from World Bank data. Slovaks (104%), Hungarians (103%) and Poles are also better off than Czechs with 100%.
“Every resident of the Czech Republic, including infants, had an average of around 25,000 kroner less at their disposal last year than they should have had if the wealth created in the country had remained in the country or, in the event of an outflow, had been fully compensated by the inflow of wealth from abroad. for example in the form of dividends or investments,” explained the economist.
According to him, the Czech economy has been a “runoff economy” for many years. Kovanda recalled that even before the outbreak of the covid-19 pandemic or the Russian invasion of Ukraine, the Czech Republic ranked first among OECD countries in terms of wealth outflow.
According to the economist, the reason for the outflow of wealth is the outflow of billions of crowns abroad in the form of dividends, which is not compensated by a sufficient inflow of foreign investments into the Czech Republic. “The main reason for the enormous outflow of wealth from the Czech Republic is the regular, practically annual outflow of hundreds of billions of crowns abroad in the form of dividends, which is not compensated by sufficient foreign investment in the country,” wrote Kovanda.
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author: Lucie Kroutilová