The Czech Republic is the ninth most advanced economy in the European Union. It excels in the GDP per capita, level of investment relative to GDP, economic complexity and diversification of production but has low added value in production that prevents the country from achieving better results. These are the results of the 2021 Prosperity Index that compares the quality of life and prosperity of the Czech Republic with other EU countries. In addition to macroeconomic data, the assessed areas include a number of other important aspects, such as the quality of education, health or the environment, and seek ways to improve the living conditions of individuals and businesses in the Czech Republic.
The economic level measured by GDP per capita is higher in the Czech Republic than in Italy, Spain or Portugal, and the country is just behind the United Kingdom. Moreover, Czechia was among the three European countries with the highest level of investment relative to GDP – 26.3 per cent of what is produced here is invested back in the economy.
The economic complexity of the Czech economy is the second-best in the EU and the high degree of diversification increases the economy’s resilience to shocks. However, this strength of the Czech economy is not reflected in the level of value added of the economy or the share of national income in domestic products. Therefore, the Czech Republic could achieve a better ranking by investing in areas that will increase the share of added value in production and changing the structure of the economy, innovation, and education.
In the 2021 Prosperity index, Sweden ranked first, followed by Germany and Denmark. The Czech Republic’s ninth place is the best ranking compared to other countries in the former Eastern bloc. On the other hand, Cyprus, Poland and Greece have the least healthy economies within the European Union. The economies of these three countries are harmed mainly by high public debt compared to GDP, low investment rates relative to GDP and low GDP per capita.
However, the overall trend has significantly shifted in the last few years. While the global prosperity had been improving steadily between 2015 and 2019, the health and economic consequences of the COVID-19 pandemic has reversed the previous trend and caused not only a major fall in GDP per capita but a considerable rise in unemployment and government debt around the world.
The Prosperity Index is a joint project of Europe in Data portal and the analytical team of Česká spořitelna. The research is based on ten basic pillars: the state of the Czech economy, quality of the labour market, level of infrastructure, quality of the business environment, quality of education and research, the financial health of the population, standard of living, health and safety of the population, state of the environment, and solidarity. Within each pillar, analysts monitor several indicators based on publicly available data sources ( such as Eurostat or OECD) or data provided by the data and analysis team of Česká spořitelna. The individual results are then evaluated as the order of the states.