Purchasing power indicates how much of a good or service can be bought at a given price level with a given amount of money. We can use purchasing power to see how our standard of living is changing. When the price level rises (inflation), our purchasing power decreases because we buy fewer goods or services for the same amount of money. Conversely, when the price level falls, we buy more goods and services with the same amount of money.
Czech purchasing power
For example, GfK measures the purchasing power of people in individual countries. In 2019, the purchasing power of the average Czech resident was EUR 9,959 per year, which was approximately 32 percent below the European average. In a comparison of European countries, the Czech Republic ranks 24th. Countries with the highest purchasing power include Liechtenstein (€67,550 per year), Switzerland and Luxembourg. In contrast, the lowest purchasing power is enjoyed by the inhabitants of Ukraine.
Prague residents have the highest purchasing power in the Czech Republic
Purchasing power also varies within individual districts of the Czech Republic. Residents of the capital city of Prague and the two neighbouring districts of Praha-západ and Praha-východ have the highest purchasing power. The fourth place in the ranking was occupied by the city of Brno. The top ten places with the highest purchasing power is Benešov.