Inflation was the fourth strongest in the Czech Republic. Only Hungary and the Baltics were more expensive

Inflation was the fourth strongest in the Czech Republic. Only Hungary and the Baltics were more expensive
Inflation was the fourth strongest in the Czech Republic. Only Hungary and the Baltics were more expensive

Only Hungary recorded a higher result, where prices rose by 61 percent, and then Estonia and Lithuania where prices rose by fifty percent. Over the past eight years, restaurants and hostels have fallen the most in the Czech Republic, followed by a sharp rise in housing, water and energy costs.

According to the analysis of esk spoitelna, in addition to the lack of competition and scattered management of the government and parliament, during the years of the pandemic, which both fall into the monitored period, the labor market was strained. This factor has been there for many years, even though the unemployment rate is the lowest in the entire European Union since the beginning of 2016. The weight of corporate demand for labor over supply from the household side was in full swing last year after a pause during the coronavirus crisis, Michal Skoepa , esk spoitelna analyst.

Factor in real estate prices. It is a question of course, because in the last few months the growth of real estate prices in the Czech Republic has accelerated so much that it has reached the top of the EU tariff. I would be wrong, but I suspect that the reason behind this is, among other things, the low financial literacy of the Czech population, in the sense that many people conclude from the previous rapid increase in house and apartment prices that this will always be the case, at least right now for the specific house or apartment they bought, and therefore that such an investment cannot be extended. stated Skoepa.

Last but not least, the openness of the Czech economy plays a certain role in high inflation values. Compared to these closed economies, such as Poland and Germany, the post-pandemic increase in international transport and logistics prices plays a major role.

By 2022, the domestic price level was roughly a fifth lower than the EU country average. For example, in the case of foodstuffs, the Czech Republic was equal to 97 percent of the EU at the time. And in the prices of clothing and footwear, the country even improved, when it ranked fifth with a value of 112 percent equal to the EU. The prices of milk, cheese and eggs were also above average. On the other hand, R reaches the lowest values ​​in the area of ​​health, only 58 percent of the EU average, the company said in the analysis.

Decline in purchases not only in esk

The growth of nominal wages could not keep pace with the increase in prices, and the subsequent decline in consumption by Czech households was manifested not only in domestic purchases, but also abroad. While in 2023 in Poland, clients of esk spoitelna spent an average of 218 million crowns per month, in January 2024 it was only 145 million crowns, i.e. by one-tenth the amount. Even a dog, but the volume of card transactions in Poland is roughly seven times that of before the coronavirus pandemic in 2019, data from esk spoitelna show.

The inflation outlook for 2024 is, according to economists, pznivj. According to the Czech Bank Association, price growth should reach 2.7 percent for the whole year, while the Czech National Bank forecasts that it will be a tenth slower.

The article is in Czech

Tags: Inflation fourth strongest Czech Republic Hungary Baltics expensive


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