The Czech economy has been outperforming its central European neighbours and is set to reach something of a psychological milestone next year, when GDP per capita is on track to reach 85 percent of the Eurozone average. In more tangible terms, though, the average Czech is enjoying greater purchasing power, and confident they can always find work.
The rise in apartment prices in the Czech Republic, which has been extremely rapid in recent years, has come to a halt or at least decelerated, due to Czechs reaching the limits of their purchasing power as well as new mortgage regulations, iDnes.cz reported. However, things are rather different in Prague, the news site said.
Downward pressure on the Czech crown will likely continue for years to come
due to gradual sell-offs by foreign investors who bought a large volume of
the currency during the three-year period of intervention by the Czech
National Bank to keep the domestic currency artificially weaker, analysts
The crown weakened to below 26 to the euro in mid-November, its lowest level been since June, when the central bank started began a series of interest rate hikes, of which there have been five in 2018.
Pressure on the crown is unlikely to ease for the rest of the year as Czech economic growth lagged behind its regional peers in the third quarter. It is also under pressure from seasonal euro buying by banks that cut crown deposits at the end of the year to reduce payments into the state-run "Resolution Fund".
However, while the crown’s expected weakness in the coming weeks would, technically, open room for a December rate increase some analysts say it now seems more likely policy makers will wait for the year-end effect to fizzle out before they act again.
The Czech economy grew at a rate of 2.3 percent year-on-year in the third
quarter of 2018, according to data published by the Czech Statistical
Office (ČSÚ) on Wednesday.
In quarterly terms, GDP increased by 0.4 percentage points in July through September.
In 2017, the Czech economy grew 4.4 percent in annual terms, up from 2.6 percent growth in 2016. Analysts predict more sluggish growth in 2018, of below 3 percent.
Unemployment dropped to a 21-year low of 2.8 percent in October and some analysts say the economy was at full capacity last year.
Czechs are borrowing more than ever to buy Christmas presents for their relatives and friends, suggests a survey carried out among the country’s non-banking consumer lenders. In the months preceding the festive season, loan firms are traditionally recording an increase in the number of loan applications.
The number of Czech families who have a problem making ends meet on their
family budget has dropped to its lowest since 2012, according to the
results of a survey conducted by the CVVM agency.
Fifty-four percent of respondents said they had no trouble meeting their needs on their present income, while 43 percent said this presented a difficulty. Twenty-two percent of households consider themselves poor, and 12 percent are in serious financial straits.
The number of households which consider themselves poor in the over-60 age bracket is 32 percent. According to CVVM, the financial situation of Czech households has gradually been improving since 2012.
In recent years, Prague has seen a surge in the number of people offering their rooms and apartments for rent. In fact, every fifth apartment in the downtown area is now rented out via Airbnb or similar services, according to a new study. But experts say fears of city centre depopulation may be exaggerated.
Unemployment in the Czech Republic dropped to 2.8 percent in October, which
is the lowest point since June 1997, the Czech Labour Office announced on
The number of people without work was around 215.622, while the number of vacancies grew to nearly 316,900. Last October, unemployment stood at 3.6 percent.
Meanwhile, the number of long-term unemployed dropped by 7.6 percent year-on-year, to 29.9 percent (of the total number of unemployed).
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