Why are prices lower in Prague than elsewhere?
After several months of the biggest price hike in the history of the Czech Republic, people shopped in the style of “spend what you can, tomorrow it will be more expensive”, a turnaround has come in recent weeks. Under the weight of dramatically rising bills for basic services and goods such as electricity, gas, petrol or food, people are cutting back on spending.
In May, for which the latest data is available, people already bought 6.9 percent fewer goods and services than in the previous year. Even a month before, the numbers were growing by six percent. Economists expect that the drop in sales will drag the economy into a slump in the third quarter of the year. It was those purchases in the style of “spend what you can, tomorrow it will be more expensive” that helped the fact that in the first half of the year, according to the first preliminary estimate of the statistics of the Czech economy, despite the energy crisis, the war in Ukraine and severed global trade ties, it grew by 3% compared to the previous year. 6 percent. However, the mentioned fall in sales already occurred in May and it can be expected that it will continue in the following months.
The state does not have much detailed data on which stratum and how high inflation affects the most. In addition to the average Czech household, the statistics specifically monitor inflation only for families in Prague and for senior citizens. It is the prices in the capital that often differ more significantly from the national average than in other regions. Pensioners are very specific individuals precisely because the state must, according to the law, match their pensions with price increases. Prague has long been distinguished from real estate prices primarily by its rapid growth. These are not directly reflected in inflation. They are tracked in special indexes.
Comparisons of price increases for the average Czech, the average Prague resident and the elderly are interesting. They reflect not only different prices, but also different shopping styles. Retirees often buy different things than younger generations. An interesting trend emerges from comparing the effects of price increases. Overall, prices in Prague are rising somewhat more slowly than the average for the Czech Republic. While overall inflation was 17.2 percent in June, it was only 16.7 percent in the capital. This is the overall picture for all goods and services. It varies significantly from one spending to another. But the sum gives a lower inflation for Prague. A big role here is played by food and transport expenses, which have risen less than the national average in Prague over the past year. On the other hand, the household bills of pensioners do not differ significantly from the average Czech family in the rate of price increase.
In June, the total prices of food and non-alcoholic beverages rose by 18 percent compared to the previous year. In Prague it was only 17.3 percent. This can have two explanations.
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