Prosperity index: Czech quality of life ranks highest among CEE countries

According to 2022 Prosperity Index, a joint project by information portal Europe In Data and bank Česká spořitelna, the Czech Republic has the 13th-best quality of life out of 27 EU countries, ranking among the highest of all Central and Eastern European (CEE) states.

The country scores particularly well in personal safety and healthcare availability but is constrained by its relatively poor scores in its environment and housing standards.

The index incorporates ten different categories in calculating countries’ overall positions, including the economy, labor market, digitization, and levels of freedom. 

The country scored highest in the “health and safety” category, ranking third out of all EU countries. This is down to the relatively low crime rate in the country; a 2021 crime index placed Czechia among the top five safest countries in the bloc. A 2020 Eurostat study also found that the country had three times fewer robbery offenses compared with the EU average.

The strong score in health is also explained by the strong availability of healthcare professionals in the country, with just 0.3 percent of the population unable to afford healthcare. However, recent reports of long waiting lists put Czechia’s current ranking in a tenuous position. Obesity is prevalent in Czechia and affects its overall health score, with almost one in five Czechs technically obese.

Czechia scored well in terms of its economy (ranking ninth) and solidly in its labor market (coming 13th), owing to the fact it has one of the most “complex” economies in the EU (second only to Germany) and vast manufacturing capabilities. Czechia is also among the three European countries with the highest rate of reinvestment in relation to GDP; 26 percent of what is made is invested back into the country.

In terms of its citizens' financial health, the Czech Republic is ranked roughly in the middle of all countries, in the 13th position. The study shows that the average Czech household saves 19 percent of its average monthly salary. The grim cost-of-living situation in the country now, however, may cause these rankings to shift very soon.

The country finds itself in the median of the rankings for infrastructure and digitalization. Holding the accolade of having the densest railway network in the EU boosts its score in infrastructure, however, flaws in road quality constrained the overall ranking. Digitization is above average the EU average, but poor high-speed internet coverage and limited digitized communication with state administration are areas that need to be improved, according to the index.

The country also scored an average rating in education and research, ranking 13th out of all nations. Just one in three Czechs aged 25 to 34 holds a bachelor’s degree – among the lowest rates in the whole bloc. Further, just 5.1 percent of annual public expenditure is spent on education – lower than most EU countries. Charles University Head Milena Králíčková told Seznam Zprávy that "unfortunately, the entire education system” was “still underfunded” and in need of “support in the form of long-term, increased funding.”

The environment and housing prove to be Czechia’s weakest areas. It is ranked 23rd for its environmental standards, despite investing one of the highest amounts of all EU countries in environmental protection. More than half a ton of waste is produced per Czceh resident annually, far above the EU average. Moreover, 11.7 tons of CO2 equivalent per inhabitant are produced per year in Czechia, which is the third-highest rate in the EU.

In terms of housing, skyrocketing inflation in rental and purchase prices were the main reasons why the Czech Republic is ranked 21st out of 27 countries for its category on housing standards.

A 2022 Deloitte study found that the Czech Republic had the least affordable housing out of any European country, with buyers on average needing 13.3 gross annual salaries to purchase a new property. Average price rises of about 25 to 30 percent year on year in previous quarters of 2022 also contribute to the poor ranking, as does the high cost of new houses’ construction and above-average operational costs. 

Although the country has performed reasonably well in the Prosperity Index – especially in relation to other CEE countries – some advise caution. Česká spořitelna Chief Economist David Navrátil says in Seznam Zprávy that "next year, we can move to an even worse place” given that “the economy will be negatively affected by above-average inflation and the [currently] above-average state of borrowing.”

On the other hand, economist Lukáš Kovanda said he felt “optimistic” about 2023, despite a likely increase in unemployment and consumer spending.