The Czech Republic has the ninth most advanced economy in the European Union compared to other former Eastern Bloc countries. According to the Prosperity Index, which is the result of joint research by Česká Spořitelna and the data portal Europe in Data. Sweden, Germany, and Denmark came out best.
“The economic level measured by gross domestic product (GDP) per capita is higher in the Czech Republic than in Italy, Spain, or Portugal. This is an excellent result of the economic transformation in the 1990s, “said David Navrátil, chief economist at Česká Spořitelna.
By contrast, Cyprus, Poland, and Greece have the least healthy economies in the EU. The economies of these countries are mainly hurt by high public debt and low investment to output ratios, and low GDP per capita.
The advantage of diversification
Navrátil said the Czech economy is also highly diversified, which increases its resilience to shocks. The weakness, however, is that this does not translate much into high value-added or the aforementioned national income. On these two variables, the Czech Republic finished third from last on the other hand.
“If we simplify it a lot, we have already caught up with Germany in terms of production. However, the value-added, or more simply, the margin we can obtain from this production is 20% lower than Germany. The national income that will eventually remain in the Czech Republic is another ten percentage points lower,” Navrátil said.
How did they calculate the results?
In creating the index, the researchers worked with publicly available data from Eurostat, the OECD, the World Bank, the United Nations, the World Health Organization, and the analytical team of Česká spořitelna.
They assessed the state of individual EU economies according to ten criteria: economic complexity, GDP per capita, GDP to GNP ratio, gross value added to total output, inflation rate, investment to GDP, number of robots per 10,000 employees, value-added to exports, foreign direct investment, and public debt to GDP.
In addition to the state of the economy, the researchers looked at nine other headings, such as education, health, and the environment. The results will be published on an ongoing basis.