The Czech economy is not doing well at all. It actually came out of the blue. While most European countries have returned to decent growth after the crisis years, and even the infamous southern wing of the continent is getting out of the water, today it seems most of all that the new problematic state from this point of view is the Czech Republic.
A gloomy forecast
As the only country in the entire European Union, we were unable to return to the level of gross domestic product achieved in 2019, i.e. four years ago. Yes, we have been dealing with stagnation alternating with decline for so long, and it looks like it will continue for at least another year. This is basically a completely lost five-year-old.
Apparently, this will not be without consequences. Even large foreign banks, such as Nomura or Goldman Sachs, are already noticing the problems of the Czech economy. Both predict the decline of the Czech crown, which would mean a really big financial blow to Czech households.
In essence, the purchasing power of their wages and savings would be lost to them again. A currency crisis in the Czech Republic, as predicted by Nomura’s analysts, would mean that the value of the koruna would fall, which would not only make vacations more expensive and mean impoverishment compared to other countries, but also all imports, whether food , electronics or fuel.
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Not a nice comparison
Bankers even go so far as to compare the Czech Republic with countries such as Turkey or Sri Lanka, where the currency crisis has already erupted. It is said that it is not well done here, which is the result of several factors. Above all, long-term unsolved inflation, which has reached more than 30% in the last three years, then rapidly increasing indebtedness, but also the trade balance deficit.
Read also: Czechs make big money from price gouging. They came up with a method that will bring them thousands of crowns every month
All these are simply factors that push for a weakening of the currency, which can come very unexpectedly. Domestic economists claim that it is unlikely, but outsiders obviously look at it differently and it does not look the best here.
Anna Štěpánková’s comment
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2023-12-27 18:32:44
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