Czech purchasing power drops for the first time in four years

For the first time in four years, Czechs' purchasing power has declined, primarily due to a weakening of the koruna against the euro.

On average, Czechs have about €14,000 annually (less than CZK 360,000) nearly €200 less than last year. This has widened the gap between Czech purchasing power and the European average, which stands at roughly €19,000.

The koruna's depreciation has significantly impacted the Czech economy, leading to the sharpest decline in purchasing power in Europe, according to Šimon Dvorský, senior consultant at GfK. Despite this, experts predict some growth in purchasing power next year, although at a slower rate.

Regionally, there are stark differences in purchasing power. Ostrava ranks lowest, with residents managing just 86.4 percent of the national average. In contrast, Prague residents enjoy the highest purchasing power, with an average of 132 percent of the national norm, though areas like the Řepy district fall below the capital's average.

Meanwhile, the koruna is at its weakest against the U.S. dollar in two years, approaching 24 CZK/USD. The currency's fall has put additional pressure on regional currencies. The Prague Stock Exchange also saw slight losses, with some energy stocks gaining while shares of Philip Morris and VIG weakened.

Experts suggest that the Czech koruna and regional currencies will remain vulnerable, particularly amid developments in the U.S., where a potential rise in tariffs could further affect European markets.