The Czech Republic improved five places year-on-year, according to the prosperity index, and is now a ninth most advanced economy in the European union. This improvement was achieved mostly by a reduction in inflation, stabilisation of public debt and increasing proportion on national income in GDP. The inflation decreased from above 15 % in 2023 to 2.7 % in 2024. Thus, the Czech economy is in better shape than, for example, Italy or Belgium.

The improvement is also because an increasing amount of income and capital stays within the Czech Republic, bolstering the domestic economy. Czech companies like ČEZ and ČEPS are reclaiming gas assets, while investments by groups like EPH and Sev.en are boosting the Czech Republic’s energy sector abroad.

Data also shows that the Czech Republic is among the three least indebted countries in the EU. Although the Czech government debt will surpass 3 trillion Czech crowns in 2023, the increase in nominal economic output has reduced the country’s relative debt to about 42 % of GDP. This is significantly lower than the eurozone average, which is nearly double. For instance, Greece’s debt-to-GDP ratio is almost 170 %. This is reflected, among other indicators, by the ongoing investor interest in Czech government bonds.

With the Czech Republic’s increasing economic stability and growth, foreign investors might find it easier to enter the market and establish a presence in the region. 

Source: CTK; Novinky.cz

Prepared by the CzechTrade London team