Prague is the third richest region in the European Union. Fill it out with the latest Eurostat data released by the office yesterday. Gross domestic product per capita, expressed in the standard of purchasing power, which allows for international comparison, accounted for a total of 205 percent of the European Union in the Czech capital in 2019. Only Luxembourg was better off with 260 percent of the EU and the southern part of Ireland with 240 percent.
Luxembourg has long been the richest region in the EU, for the past decade. The southern part of Ireland jumped to second place in 2015. The growth of Ireland’s gross domestic product in 2015 was so extraordinary that it, resp. Eurostat issued a separate statement for the relevant revisions. At the time, the EU Statistics Office explained Ireland’s sharp measures as a result of globalization and the relocation of large multinationals. Ireland is a sought-after European base, for example, for large American technology companies such as Apple. It is the presence of these companies in the south of Ireland that has the lion’s share in the fact that, since 2015, it has been the second to third richest region in the EU.
The example of Ireland also illustrates that a high gross domestic product per capita may not be entirely closely linked to the standard of living of the region’s population, even when calculated according to standard purchasing power. Gross domestic product captures the wealth that is created in a given area, respectively. the value of the goods and services that are produced there, but still how much of this value created also remains in the region, and certainly not how this value is distributed among the population.
With this in mind, it is also necessary to take into account the third place in Prague. A substantial part of the gross domestic product created in Prague, resp. companies based in Prague, which represent subsidiaries of foreign parent companies, ie degassed in the form of dividends abroad.
Even so, it is certainly favorable that Prague has strengthened its position in the ranking over the past decade. Last year, but also in 2018, it ranked third in the whole EU, which in the years since 2010 was placed in fourth to seventh place. It finished in seventh place in 2012, and since then it has been able to trend-ranking. It is not a matter of course. For example, the Bratislava region occupied the fourth place in 2013, so it placed ahead of the then sixth Prague, but since then it has dropped to the thirteenth place last year.
In 2018 and 2019, however, Prague managed to get ahead of the regions more permanently Brussels and Hamburg, which it consistently lagged behind from 2010 to 2017.
Lukáš Kovanda, Ph.D.
National Economic Council of the Government (NERV)
Chief Economist, Trinity Bank
Trinity Bank has been operating on the financial market for 25 years and was established by the transformation of the Moravian Monetary Institute – a savings cooperative. It has almost 25,000 clients and its balance sheet total exceeds CZK 18 billion.
Trinity Bank specializes in private and corporate banking, with individuals focusing primarily on deposit and savings products that offer above-standard savings.
More information at: www.trinitybank.cz