Posts

, , ,

Czechia Poverty Rate Remains Low

Czechia Poverty RateThe Czechia poverty rate continues to rank among the lowest in the EU. At 5.9 percent, the eastern European nation, which shed its English moniker of “Czech Republic” early in 2017, beat out such neighbors as Poland, Portugal, Hungary, Italy and Spain, all of whom have rates exceeding 10 percent.

In the OECD, Czechia ranks behind only Denmark in terms of poverty rate, which measures the amount of families living below a country’s poverty line. In Czechia, that number is 10,220 crowns (about $431 USD) per individual and 21,461 crowns (about $906 USD) for families with children.

Based on population-weighted estimates drawn from household surveys, the poverty rate is not necessarily a perfect benchmark for comparison between nations. Indicators are specific to each country’s economic and social circumstances, and a variety of factors influence perception of poverty.

However, other metrics tell the same story of a robust quality of life within Czechia. Not only is the Czechia poverty rate one of the lowest, the nation’s wealth inequality outperforms other high-performing countries. Only 22 percent of Czech income is held by the wealthiest 10 percent, lower than the U.S., China, Indonesia and Chile, who have rates of 30.2, 31.4, 31.9 and 41.5 percent respectively. The Gini coefficient, which measures income inequality, is a relatively low .26 for Czechia, and unemployment lingers at an impressive 3 percent as of 2017.

Explanations for the country’s favorable economic indicators are many. Czechia has an excellent education track record, with enrollment standing at 99.75 percent. Government funds have been redirected to education over the past decade, while decreasing in other sectors such as infrastructure. Public reform following the 2008 global economic crisis saw a VAT hike and reduction of social welfare benefits, but included significant tax discounts in other sectors of the economy and pensions that nearly doubled.

Though these factors have aided in suppressing the Czechia poverty rate, conditions for the majority of employees are not necessarily as complimentary. As average Czech wages increase, they still remain substantially lower than the EU median. An average wage across industry of $23,003 USD reflects Czechia’s tough minimum wage, which remains one of the lowest among OECD nations. The country’s main source of income comes from engineering and machine-building industries, which accounts for 37.5 percent of the economy. With a popular tourist destination for a capital, services bring in around 60 percent of Czechia’s wealth.

Forecasts predict a sustained pace of economic growth but slowing rates of employment. Inflation, which jumped from 2016 to 2017, is expected to decline as debt continues to diminish post-recession. It remains to be seen whether or not the trend in Czechia’s low poverty rate will continue.

– Mikaela Krim

Photo: Google

, ,

Worst to First in Europe: Comparative Poverty in Czechia


Changing its name from the Czech Republic to Czechia in 2016, this Central European country has recently been on the rise economically, and poverty in Czechia has improved. A current account recorded a trade surplus just under one percent of the Gross Domestic Product (GDP) in 2015. This was an increase of more than four percent in five years, from a deficit of 3.6 percent in 2010.

In categorical comparison with other countries, the picture of the position of poverty in Czechia – a small, landlocked nation – is bright.

GDP at Purchasing Power Parity (PPP) is a sound indicator of how poverty in Czechia affects the country as a whole, as it represents the final value of all goods and services produced in a single year factored at current United States exchange rates.

Poverty in Czechia is minimal and limited, based on GDP at PPP, as the country ranked 50th out of the 230 countries, nation-states and islands evaluated by the Central Intelligence Agency’s World Fact Book in 2016. The GDP at PPP for Czechia was a reported $315 billion in 2016. Comparatively, China is ranked number one with a GDP at PPP of more than $21 trillion and the small New Zealand island of Tokelau ranked last with a GDP at PPP of $1.5 million.

The actual GDP of Czechia in 2015 was $185.2 billion, according to The World Bank. With a population of 10.5 million people at the time, the GDP per capita was around $32,500 in 2015. Comparatively, Czechia ranked 58th in 2016 with a GDP per capita; Qatar ranked first, at $129,700 per capita and Somalia ranked 230th, or last, with a 2016 GDP per capita of merely $400.

According to The World Bank, poverty in Czechia was at 9.7 percent in 2013, a representative decrease in the percentage of people living at or below the poverty level from a decade prior, when the figure was at 10 percent.

The statistics and graphs shown on The World Bank’s database show large amounts of fluctuation in the poverty levels in Czechia over the last decade, rising and falling almost annually. While this figure fluctuates greatly, a stabilized number in the statistics on poverty in Czechia is the percentage of the population living on less than $1.90 a day. Less than a tenth of a percent of the Czechian population survives on less than $1.90, and that number has been the same for more than a half-decade.

The World Bank predicts a 2.5 percent growth in GDP this fiscal year (2017) for Czechia and a population growth under two-tenths of a percentage point. Currently, in the small, landlocked country–less than the size of South Carolina–there are 137 people per square kilometer.

The country’s Gross National Income in 2015 was around $18,000, and the lowest 20 percent of the earnings population accounted for 9.6 percent of the income share in 2012.

The average life expectancy in the country was 79.5 years in 2015, with 100 percent of the population having access to improved water systems. More than 99 percent of the people used improved sanitation facilities that year.

Poverty in Czechia is on the decline as the Central European member of the European Union saw a 4.5 percent growth in GDP in 2015. Compared to other countries being studied, Czechia is a stably improving country of prosperity, with its auto and manufacturing industries supporting internal growth.

– Shaun Savarese

Photo: Flickr