The Czech Republic dropped from 15th to 16th last year according to the Prosperity and Financial Health Index, which ranks EU countries. The drop was mainly due to the high costs of housing, as reflected in the results of the index by Ceska Sporitelna bank and the data portal Europe in Data, presented to CTK today.
The Nordic countries have long occupied the top spots in the index, offering the best living conditions, but for the first time this year Austria is at the top of the ranking.
In this year’s study, the Czech Republic fared worst in the area of housing affordability, which is one of the most pressing problems of prosperity, ranging from high prices of new buildings and lengthy construction procedures to the cost of running a household. In contrast, the Czech Republic scored well in the area of health and safety, especially thanks to the availability of healthcare and managed cyber security.
“The Czech Republic has deteriorated in six of the ten pillars, which puts us closer to the eastern countries that are placed at the bottom of the ranking in terms of prosperity,” said Tomas Odstrcil, an analyst from Europe in Data.
The Czech Republic is among the six worst EU countries in terms of housing costs, due to high property prices, lengthy construction procedures, high household expenses and expensive new buildings. While in previous years rental housing was relatively affordable compared to owning property, by 2024 this indicator had fallen to the EU average.
“Young people are the biggest victims of the current housing crisis,” said Martin Lux of the Institute of Sociology at the Czech Academy of Sciences. “Without the financial support of their families, owning their own home is increasingly an unreachable dream. And rental housing does not yet offer much security.”
The pillars where the Czech Republic is performing poorly are the environment and conditions for entrepreneurs, ranking 22nd in both. For the environment, high emissions are a problem, especially from heating, land use, and in terms of overall per capita greenhouse gas emissions.
In terms of the business environment, the market is suffering from a lack of new start-ups, foreign companies taking a high share of added value, and the low capitalisation of the Prague Stock Exchange, which discourages potential investors. Entrepreneurs have also been hit by rising electricity prices, which have tripled in three years.
Digital infrastructure, especially high-speed Internet coverage, is also problematic. The Czech Republic has fallen to last but one place in the EU in this respect, with high-speed Internet available in only 54% of the country. By contrast, the situation with mobile connections is much better; 96% of the population has access to 5G networks, which puts the country among Europe’s top countries.
The Czech Republic has seen the biggest shift in the financial health of its population. While in 2022 it was in 13th place, this year it is in ninth place. The biggest difference is in savings. “The household savings rate has already increased relative to the long-term average during the (COVID-19) pandemic, especially for higher-income households,” said Tereza Hrtusova of Ceska sporitelna bank. “Its maintenance in the following years can be explained to some extent by higher interest rates, which in the Czech Republic were above the EU average.”
In health and safety, the Czech Republic ranked top in the Prosperity Index. The success is mainly due to the managed protection against cybercrime, very low infant mortality and relatively accessible medical care.
