NORDIC chamber of commerce in the czech republic czech economy facts in brief 2015
Czech economy facts in brief 2015 Industrial production has for centuries played a crucial role in Czech economy. In the Austro-Hungarian period the Czech lands emerged as an industrial base for the entire monarchy. When multi-national Czechoslovakia was estab- lished in 1918, manufacturing developed so greatly that the country took place among the world’s larger industrial countries. Nowadays, industry is still a significant part of the country’s economy, making up almost 40 percent of its GDP. The main pillars are engineering and machine production, transport equipment, mining and chemistry, followed by the energy industry, civil engineering and consumer goods. Since the early 1990s the importance of science and research, for instance within nanotechnology, has been rapidly growing. (Nordic News) 1937 USD 1950 USD 1989 USD 5. Denmark 5,668 10. Denmark 6,943 4. Denmark 18,261 8. Sweden 4,755 12. Sweden 6,739 7. Sweden 17,524 10. Germany 4,685 19. Germany 3,881 14. Germany 16,558 19. Austria 3,156 20. Austria 3,706 16. Austria 16,360 21. Czech Rep. 2,882 23. Czech Rep. 3,501 28. Czech Rep. 8,768 GDP per capita global ranking Source: Madison Project 1990-2014: RAPID GROWTH WITH MARKET ECONOMY In real terms the GDP of the Czech Republic grew by nearly 50 percent from 1989 to 2014. In the same period the country’s real average wage increased by 52 percent, from nominally CZK 3,170 to CZK 25,800. “A quarter of a century with market economy has significantly improved Czech economic output and our standard of living,” comments David Marek, chief economist at Deloitte. In purchasing power parity Czech GDP per capita grew from 60percent compared to EC average in 1993 to 84 percent compared to EU average in 2014. (ČTK) 2014 GDP 2014 GDP (PPP) GDP (nom.) GDP (PPP) euro mill. per capita per capita EU 28=100% Denmark 256,938 33,900 45,500 124 Sweden 430,258 34,100 44,300 124 Finland 204,015 30,000 37,400 110 Czech Rep. 154,939 23,000 14,700 84 Slovakia 75,215 20,800 13,900 76 Poland 413,133 18,600 10,700 68 Hungary 103,303 18,500 10,500 68 Source: Eurostat 1 2
2015: A CENTRAL EUROPEAN TIGER ROARS Czech economic growth in 2015 accelerated to a record and outpaced all other EU members in the first quarter, helped by a policy of keeping the currency weak and the government’s looser budget stance. According to the Czech Statistics Office the GDP rose by 3.9 percent from a year earlier, the fastest clip since the second quarter of 2008. “The current economic recovery stands on strong foundations, supported by growth in foreign markets, declining oil prices and domestic fiscal and monetary policy,” Jiří Skop, a senior economist of Komerční Banka said. (Bloomberg) GDP growth % 2009 2010 2011 2012 2013 2014 2015* 2016* Czech Republic -4.70 2.14 1.97 -0.73 -0.71 1.99 3.10 2.48 Euro zone -4.45 1.97 1.66 -0.81 -0.34 0.85 1.45 2.06 Hungary -6.47 0.77 1.81 -1.80 1.66 3.60 2.96 2.24 Poland 2.63 3.70 4.76 1.76 1.73 3.44 3.51 3.70 Slovakia -5.29 4.83 2.70 1.60 1.42 2.41 2.96 3.40 *Forecast Source: OECD MASSIVE INVESTMENTS FROM WESTERN EUROPE Since the early 1990s the Czech Republic has been one of the most successful transition economies in terms of attracting foreign direct investment; since 1993 almost EUR 84 billion in FDI has been recorded. The introduction of investment incentives in 1998 further stimulated a massive FDI inflow, both into greenfield and brownfield projects. The implementation of EU rules and regulations has also helped to improve the business environment and attract FDI. According to the Economist Intelligence Unit, the Czech Republichas consistently attracted a high rate of foreign direct investment per capita since 2000. (CzechInvest) EUROPEAN INVESTORS DOMINATE STRONGEST FOCUS ON PRODUCTION 1. Netherlands 763,8 Manufacturing industry 32.2 2. Austria 373,7 Finance & Insurance 27.9 3. Germany 301,0 Warehouses & Retail 10.1 4. Luxembourg 162,1 Real estate 6.8 5. France 152,3 ICT business 4.9 15. Sweden 31,3 Private property sales 2.8 18. Denmark 16,8 Technical field 1.8 22. Finland 5,9 Science & Research 1.7 24. Norway 3,0 Rest 6.7 In CZK bill. In % Source: ČNB LABOUR COSTS BELOW EU AVERAGE According to the Czech Statistical Office (ČSÚ) the median monthly wage in the Czech Republic grew by CZK 515 to CZK 23,072 in 2014; the average monthly wage in 2014 reached CZK 25,686. Four out of five employees were earning gross wages between CZK 12,000 and CZK 42,000 a month. The highest wages in the long term are in the banking and insurance sectors, which are about twice the average of other sectors, but employees in information and communication technologies are catching up very fast. Czech labour costs in 2014 represented roughly one third of those in Denmark, Sweden and Finland and one fourth of Norway’s. ( ČTK/Eurostat) 2 3
SMALL BUT STEADY GROWTH IN WAGES 2007 2008 2009 2010 2011 2012 2013 2014 Czech Republic 2.71 3.72 2.47 0.11 0.56 2.53 0.49 1.37 Euro zone 1.46 3.77 4.46 -0.68 0.57 1.94 1.29 1.15 Hungary 5.79 4.63 2.73 -0.35 1.59 3.50 0.78 2.45 Poland 2.09 7.97 1.43 2.14 1.15 1.82 0.83 -1.92 Source: OECD Year/year % UNEMPLOYMENT FALLING... …BUT REGIONAL DIFFERENCES LARGE 1/2005 9.6 Ús tî nad Labem 1/2006 9.2 Moravia/Silesia Olomouc 1/2007 7.9 Karlovy Vary 1/2008 6.1 South Moravia 1/2009 6.8 Liberec Zlín 1/2010 9.8 Vyso č ina 1/2011 9.7 Pardubice 1/2012 9.1 South Bohemia 1/2013 8.0 Hradec Králové Central Bohemia 1/2014 8.6 Pilsen 1/2015 7.7 Prague 5/2015 6.4 National average % Source: ČSÚ May 2015 in % Source: ČSÚ THE CZECH EXPORT LOCOMOTIVE TOP TEN EXPORT MARKETS (2014) 1. Germany 1,158,693,487 Czech economy is heavily focused on exports; in 2014 the value of goods 2. Slovakia 302,360,063 and services sold abroad passed 80 percent of the country’s GDP. More than 3. Poland 215,635,904 one third of Czech total exports goes to Germany. The value of exports to 4. France 183,456,601 Bavaria alone is higher than Czech exports to the USA, India, China and Russia combined. No post-communist country is economically more closely linked to 5. United Kingdom 183,448,017 Germany as the Czech Republic. According to Jan Bureš, economist in ČSOB 15. Sweden 53,130,364 bank, Czech e conomy is so interconnected with German economy that the 19. Denmark 41,580,502 country in reality constitutes a 17th Bundesland. “Any change in German 22. Finland 19,106,838 investors’ mood is felt in Czech economy within two months,” he says. (LN) 25. Norway 16,171,188 83. Iceland 846,013 In CZK 1,000 NORDIC-CZECH TRADE & BUSINESS RELATIONS TOP TEN IMPORT ORIGINS(2014) 1. Germany 830,073,002 The Nordic countries have come to play a far more significant role in Czech 2. China 359,365,606 economy than their combined population would indicate. As a Czech export 3. Poland 245,157,946 market the Nordic countries in 2014 overshadowed USA. A number of the 4. Slovakia 168,398,227 around 400 Nordic companies currently established in the Czech Republic 5. Italy 129,754,605 are market leaders in their sector, such as the IT industry (Tieto); furniture (IKEA); paper industry (Stora Enso); construction (Skanska); pharmaceuticals 20. Sweden 27,887,899 (Novo Nordisk) and seafood (Marine Harvest). In addition to Czech-Nordic 26. Denmark 19,912,966 partnership within the EU and NATO, the cooperation also has a vital security 29. Norway 14,442,325 dimension: Sweden’s Saab is supplying Czech Air Force with Gripen jet fighters 35. Finland 10,363,547 and Norway’s Statoil safeguards Czech energy independence through natural 67. Iceland 1,300,972 gas supplies. (Nordic News) In CZK 1,000 Source: ČSÚ 3 4
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