Living in Prague is definitely not a cheap affair. Anyone who has stayed in our capital for at least a few months will confirm this. Renting an apartment costs a person the same as a summer vacation, the lunch menu rarely goes below 150 crowns, and the issue of parking is perhaps better not to discuss. On the other hand, that’s not much to be surprised about. According to Eurostat, Prague is one of the richest regions of the European Union, so it is clear that money really flies here, with a bit of exaggeration.

Moreover, it is not just a trend of the last few years. At the top of the ranking, which compares how much GDP per capita of a given territory (this is the entire category NUTS 2) will produce in 12 calendar months, the capital of the Czech Republic appears regularly. In 2012, our metropolis was ranked seventh, since then it has been constantly rising. Prague entered the top three for the first time three years ago and is the most recent Eurostat data show that nothing has changed about this fact even in 2019.

In its case, the size of the gross domestic product calculated per inhabitant is 205 percent of the entire average. Only the southern part of Ireland, with 240 percent, and Luxembourg as a whole, which stands out above the mentioned average by even 260 percent, show better values.

Being among the richest regions of the European Union is understandably a favorable finding for the given territory in terms of its prestige. However, it may not automatically mean a very high standard of living for the people living in them.

“The example of Ireland illustrates that a high gross domestic product per inhabitant may not have a very close link to the standard of living of the inhabitants of the given area, even after recalculation according to the standard of purchasing power,” explains the chief economist of Trinity Bank and a member of the National Economic Council of the Government Lukáš Kovanda . “GDP captures the wealth created in a given territory, or the value of goods and services produced there. However, it does not say how much of this created value also remains in the region, and it does not say how this value is distributed among the population.

This, of course, applies abroad as well as to the Czech capital: “A substantial part of the gross domestic product created in Prague, or by companies based in Prague, which represent the daughters of foreign parent companies, will be distributed in the form of dividends.”

Most of the Czech Republic lags behind

The result of our capital will undoubtedly be interesting, on the other hand, it must be noted that from the point of view of the entire republic, Prague is more of a visit. The rest of the country does not show such promising values. None of the other seven Czech regions to the EU-wide average didn’t get. The closest to Prague were Central Bohemia and the Southeast, which are both at the level of 83 percent of the EU average. The Southwest can be proud of 78 percent, while the Northeast 76, Central Moravia 75 and Moravian-Silesian 74 percent. According to Eurostat, the poorest region of the Czech Republic in 2019 was the northwestern region, which reached only 64 percent of the overall average.

“The difference in the wealth of individual EU cities or regions affecting many factors, not only the number of headquarters of multinational companies. Also, for example, how many people go to a given city or region for work. The larger this number, the more people create their value, which is then statistically attributed to a different region than the one they live in. The created value is then calculated on a per capita basis for fewer people than by whom it is created. Which, statistically, understandably increases the gross domestic product per inhabitant of the given economic center,” adds Kovanda.

Bratislava is starting to lose more and more

The latest Eurostat data confirmed, among other things, one specific economic trend that statisticians began to observe in the middle of the past decade – namely that the difference in wealth between Prague and Bratislava is increasing more and more in favor of the Czech metropolis.

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In the years 2010 to 2014, the two capitals of the once united state were the same, and Bratislava was even slightly better. In the end, however, the situation changed drastically. Prague grew richer with each passing year, while the city on the Danube, or the entire Bratislava region, on the contrary, began to lose.

“The gap between the two metropolises is now the widest it has been this millennium,” notes Kovanda. He explains this fact by the fact that the inflow of foreign direct investment into Slovakia is significantly smaller than in the case of the Czech Republic: “In the years 2009 to 2019, it amounted to an average of 2.5 percent of GDP per year, while to the Czech Republic it was 3.6 percent. Between 2001 and 2008, it was the same for both countries, namely 6.4 percent. It is therefore interesting that the inflow of investments in Slovakia after the adoption of the euro in 2009 slowed down compared to the inflow of investments in the Czech Republic, which did not adopt the euro.”