This is how the Czech Republic became a favourite of the investors

Post date: Feb 28, 2016 6:45:56 PM

How the Czech Republic became a favourite of the investors

The Czech Republic – A growing economy

In recent decades, the Czech Republic has become of the best places to live in Europe. At the same time, it has also become an attractive location for investors. These two facts taken together signify that this great country is now permanently on the investment map. When the Czech Republic joined the European Union at the start of the previous decade, it had only begun its economic development. Today, slightly more than a decade later, the Czech economy has doubled in size. Important parameters of a stable economy are its unemployment rate and the strength of the local currency. On both these parameters the Czech Republic is displaying good achievements: unemployment has dropped considerably, and at present is the lowest among all European Union countries. At the same time, the strength of the Czech corona, the local currency, is showing double digit growth versus the euro. How did this happen and where is the Czech Republic headed? We shall try to answer these questions below.

The Czech Republic – Some geography and history

In early May 2004 the Czech Republic joined the European Union. This was a logical move, considering the country's economic success since its separation from Slovakia in 1993. In contrast to the neighbouring countries, the Czech Republic has enjoyed a stable democratic regime, based on a stable and rapidly developing economy, from the day it was established. This is not self-evident, particularly considering that the Czech Republic is landlocked, surrounded as it is on all sides by other countries: Poland to the north, Germany to the west, Slovakia to the east, and Austria to the south. Most Czech residents belong to the Czech nation, which arrived at the current location following the Great Migration within Europe in the fifth and sixth centuries AD.

From the moment the Czech Republic separated from Slovakia in 1993, the local economy was headed in one direction – up. When the country joined the NATO alliance in 1999 this only served to emphasize its western-democratic identity. It then joined the Euro Bloc six years later, in this context a most natural and appropriate move. At present, the Czech Republic consists of over ten million residents of whom most, as stated, belong to the Czech nation.

History of the Czech Republic – for more information see here

The Czech Republic's economic miracle

In the last few decades the Czech Republic has become a real economic attraction, despite the political instability and the severe dispute over embracing the euro as the local currency. The disagreements were so significant that the Czech President announced, half seriously, that if the prime minister was not replaced a possible option was the Kalashnikov.

In the last year, the Czech Republic has managed to extricate itself from a recession and its economy has stabilized. The yields on its bonds are less than half a percent per year and they are the lowest in the world – attesting, more than anything else, to the economic stability of the Czech Republic. Annual growth of 4.7%, as of the final quarter of 2015, only confirms and reinforces this stability. The local currency, as mentioned, has shown double digit growth versus the euro over the last decade. This is a significant achievement, particularly when compared to processes in neighbouring countries. In Poland, yields on bonds are more than three percent. Hungary's bonds are even less attractive, and some call them "junk bonds".

More important is the economic forecast for the Czech Republic. On this matter the experts agree – the Czech republic has a promising future. If present growth rates continue, anyone investing in real estate or in any other area in the Czech Republic can earn nice yields on their investment.

This article summarizes an article published in Globes – read the original article here (Hebrew).

See here our report on the Czech real estate forecast for 201 (Hebrew)

See here our report on the Czech real estate forecast for 2015 (Hebrew)

See here our report on the Czech real estate forecast for 2014 (Hebrew)