Thursday

2nd Feb 2023

Czech republic leapfrogs Portugal in wealth terms

The Czech republic has joined Slovenia among new member states with higher levels of wealth per capita than old member Portugal, according to European Commission statistics.

The central European country enjoyed gross income per capita of 73 percent of the EU 25 average last year compared to 71 percent in Portugal, according to the latest estimate by the commission's statistical wing, Eurostat.

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  • Prague: people here are better off than in Portugal (Photo: European Commission)

The spending power comparison takes into account lower consumer prices in the Czech republic compared to Portugal however, with Portuguese people still carrying more money in their pockets in absolute terms.

Slovenia, which was already ahead of Portugal in 2003, is estimated to have reached 81 percent of the EU average last year.

The poorest countries were the Baltic states, Poland and Slovakia at 50 to 54 percent, while the wealthiest on over 110 percent were Ireland, the UK, the Nordic countries, Austria, the Netherlands and Luxembourg.

The results have left Slovenia and the Czech republic chasing Greece, on 83 percent, as the next old member state to overtake, with Slovenia set to draw level with Greece by 2007 and the Czech republic to narrow the gap further in the next two years, the study predicts.

Commission figures also show that Slovenians have more mobile phone subscriptions per person than many western European countries, including Germany, France and Spain.

Psychological importance

Analyst Manfred Wiedmann of Bank Austria Creditanstalt said the numbers are "psychologically important" for public opinion in new Europe.

"For these countries it is a big success, which is connected with the EU," he explained. "They can say 'OK we are in the EU, and we are no longer at the bottom of the list.'"

The expert added that the growth potential of the new members remains "very big" as the first wave of foreign investment gives way to a successive phase of companies based in the east but competing in western markets.

"In principle we [the old member states] should not be scared if someone else is profiting, because one day they could be our customer," Mr Wiedmann said. "One should not be afraid if these countries are also becoming competitive - that would be simply unfair."

But the analyst criticised wealth comparisons based on equivalent product prices and sweeping national averages, saying they mask regional differences and economic forces driving change.

"You might have near full employment near a capital like Prague, but very few jobs in remote parts of the country," he indicated.

Mr Wiedmann added that product and income price differences are the cause of corporate and individual migration in Europe.

"People make money from the difference," he said

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