Inflation in Czechland

The average gross monthly wage here in Czechland is 40.086 Kč ($1,860) which in the USA would be $22,320 per year.  By comparison the average monthly salary in the USA is $6,228 (134.248 Kč).

The 40.086 Kč is 4,4% higher that it was a year ago but once you factor in inflation, Czech wages have decreased in real terms by 9,8%.  Basically, people in Czechland are able to buy one-tenth less with the same wages that we earned a year ago.

Korean BBQ (and More)

After Lucie's birthday last week, a few of us made plans to go for some Korean BBQ.  Mộc BBQ, is a Vietnamese restaurant in Slatina is the only place Brno for Korean BBQ. 

We had quite the feast for five of us and surprisingly it wasn't tragically expensive.  If only it was in the city centre and not way out in Slatina.

Oh how I miss Korean food.  While Korean food isn't easy to come by there is one saving grace and that's the Korean grocery store, Shin K-Food, in the city centre which is where I can get kimchi and gochujang (chill pepper paste).

It seems that there's more history between Czechland and the Korean Peninsula that I previously thought.  Here's a video I found out on YouTube that talks about Czechoslovak Legionnaires supporting Korean independence from the Japanese.   

©Arirang News

Back in the days of socialism, Czechoslovakia was one of the first countries to recognise North Korea.  Diplomatic relations were established in 1948.  After the Soviet Union and China, Czechoslovakia was the third-largest provider of economic aid to Pyongyang.  The North Korean embassy in Prague serves both Czechia and Slovakia.

Diplomatic relations weren't established between Czech Republic and South Korea until 1990.  Today, more than 70 Korean-owned companies operate here in Czechland employing over 16.000 people.  

There are more than 90 Korean companies operating next door in Slovakia.  Kia Motors produces around 200.000 cars a year in Slovakia and I still love the marketing of SlovaKIA.  

In Prague, there's the Czech-Korean Society which is a non-governmental non-profit organisation connecting people and institutions between Czechland and Korea.  They have educational and cultural events but I need to see if they ever do anything in Moravia.

Czech Economic Update

Here's a few updates on what's going on lately with the Czech economy.

• In August, inflation rose 4,1% compared to last year.  This was the biggest jump since November 2008.  The record inflation level was driven by higher prices for goods, services and housing.
• In 2022 the average pension will increase by 800 Kč (~$33) to more than 16.000 Kč ($652)
• Over the past 10 years, the minimum hourly wage has risen 54% and is now 139 Kč ($6.30).  
• Over the past 10 years, the cost of living has rose by 20,2%.

Czech Unemployment Rises

Czechland has had very low unemployment and in January 2019 the unemployment rate was 1,9%.  This was the first time ever that an EU country was under 2%. 

Due to COVID-19 it was pretty certain that the unemployment rate would increase.  In November 2020 there was 3,8% unemployment and 4% in December.  This is the highest that it has been since the summer of 2017.

Even with the increase, Czechland still has the lowest unemployment rate in the European Union.

The seasonally adjusted unemployment rate in October 2020 for Czechland was 3,1%.  For comparison the entire EU rate was 7,6% and it was 8,5% for the Eurozone countries.

Spain had the highest unemployment at 16,2%.  I expected that Greece would have had the highest and it actually may have but the data for Greece wasn't available.

No Euro Yet

When I was deciding to make the move to Czechland many years ago, it looked like the country would change its currency from the Koruna to the Euro around 2015.  This was a selling point for me because I thought it would be a once in a lifetime experience to go through a currency switch.  Well I've been here 11,5 years and there's no outlook in sight for ever actually making the move.

When Czech Republic joined the EU in 2004 it became legally obligated to adopt the Euro once it fulfilled the necessary requirements for joining the Eurozone.  There's a lot to be gained by adopting the Euro.  Three of the four countries bordering Czechland all use the Euro.  More than 57% of the country's foreign trade is with countries using the Euro, almost one-third just with Germany.  If Czechia was on the Euro then it would be easier for businesses to conduct trade because no one would have to factor in foreign exchange rates.  

Czechs are reluctant to give up the Czech Crown because they know that while it would be better for the country overall, it means that things will become more expensive as prices get rounded up but salaries won't.  The country could join the Eurozone whenever it wanted to but every time it gets close to meeting all of the requirements it seems to purposefully flub things up so that can just keep kicking the can down the road.

The government has just said that due to economic conditions resulting from COVID-19 and this year's budget deficit that the country will not set a date yet to adopt the Euro because the prerequisites for joining will not be met.

There are 19 countries on the Euro.  When it was first introduced Denmark and the UK opted out.  Now that the UK has left the EU after Brexit, only Denmark doesn't have to make the switch.  Besides Czechland, Bulgaria, Croatia, Hungary, Poland, Romania, and Sweden all still need to give up their national currencies for the Euro.

Here's a short video I found on YouTube about Slovakia, from 2008, right before it was to adopt the Euro. in 2009.  It could be about Czechia today.     

©DW News

Czech Citizenship Exam: Socioeconomic Background

Here are the 10 study questions for the Czech Citizenship exam from section 22:  Socioeconomic Background.

1.  In which region is the Temelín nuclear power plant?

In the South Bohemia Region.

2.  Which of these cities connects the D1 motorway?

Prague and Brno.

3.  What is the name of the famous Czech company that makes pianos?

Petrof.

4.  Traditional brands of trucks are manufactured in Kopřivnice.  What is this brand called?

Tatra.

5.  Which brewery produces Pilsner Urquell beer?

Plzeňský Prazdroj.

6. Hops are an important raw material for beer production.  Where are hops grown?

Around the town of Žatec.

7.  Which of these materials is mined in the Czech Republic?

Brown coal.

8.  Which power plants produce the most electricity in the Czech Republic?

Coal.

9.  Which brand of cars is manufactured in Mladá Boleslav?

Škoda.

10.  The traditional Czech brand is Becherovka.  In which city is this alcoholic beverage produced?

In Karlovy Vary.

Czech Citizenship Exam: Sociocultural Background

Here are the 10 study questions for the Czech Citizenship exam from section 21: Sociocultural Background. 

1.  Approximately how many inhabitants does the Czech Republic have?

10,6 million.

2.  A national minority is a group of citizens of the Czech Republic who declare themselves to be of a nationality than than Czech.  Who is the largest national minority in the Czech Republic.

Slovaks.*

3.  The Haná cultural region is an important agricultural area and is known for its folk customs.  Which regional city is the centre of the Haná cultural region?

Olomouc.

4.  Public service radio is a radio service which provides a service to the public.  Its duties are defined by law.  Which of these radio stations in public?

Český rozhlas - Czech Radio

5.  How many inhabitants does the capital city of Prague have?

Approximately 1 300 000.

6.  In which of these regions of the Czech Republic is currently the highest percentage of unemployed?

In the Moravia-Silesian Region.

7.  Which religion is most widespread in the Czech Republic?

Christianity.

8.  In which city in the Czech Republic, after Prague, has the largest population?

Brno.

9.  Which statement corresponds to the position of women in Czech society?

Women have the same rights as men.

10.  What is the name of the largest city in Moravia?

Brno.

*Slovaks have been the largest national minority in Czechland.  Recently Ukrainians outnumbered Slovaks but for the exam the answer is still "Slovaks."

7th Least Miserable Economy

The Bloomberg Misery Index sums a country's inflation and unemployment to determine how happy or miserable its people are.  With Czechland's record low unemployment it's not wonder that they finally cracked the Top 10 of the least miserable economies.

1.  Thailand
2.  Switzerland
3.  Japan / Singapore
5.  Taiwan
6.  Malaysia
7.  Czech Republic
8.  Hong Kong
9.  Israel / South Korea

The USA jumped six spots to the 13th least miserable economy.

Having low unemployment too low can be a bad thing.  Employers may not let people move to new roles because they will be unable to find a backfill.  If prices are too low it could mean that demand is low.

Venezuela is the most miserable as inflation is expected to hit 8 million percent this year.  8 million %!!    

Coming in behind Venezuela is Argentina, South Africa, Turkey, Greece, and Ukraine.

Record Low Unemployment

Back in  September 2016 Czechland had the lowest unemployment in the EU at 5,2%.  Well it has continued to fall.  The unemployment rate here is now 1,9%.  It's the first time in EU history that a country has been under 2%.  Way to go Czechland!

Germany comes in second at 3,3%, followed by the Netherlands at 3,5%, and Hungary at 3,7%.

The EU-wide average is 6,7% and the average for the Eurozone countries is 7,9%.

The most unemployment is in Italy at 10,5%, Spain at 14,7%, and Greece at 18,6%.

More and more foreigners are coming to Czechland for work.  While foreigners only make up 5% of the population, we account for 11% of the workforce.

Rum For Debt

Cuba owes Czechland something like +6 billion koruna (~$276 million).  This is debt that dates back to the Cold War days.

Cuba doesn't have that kind of money available so it proposed paying off the debt with rum.

Cuban rum is quite popular here.  In 2015, Czech Republic imported 892 tonnes of rum from Cuba.

The Czech Finance Ministry hasn't agreed to anything but does want some of the debt actually paid in cash.

Here's the part that I don't get.  The money was owed to Czechoslovakia and Czechoslovakia spilt up in 1993.  So did Czech Republic assume the full Cuban debt?  Or was the debt spilt between Czechland and Slovakia?  Does Cuba also owe money to Slovakia?

Low Unemployment in Czechland

Unemployment is low in Czechland.  It has been falling since January and as of September is is 5,2%.

The last several quarters have seen steady growth.  Exporters see a solid demand for Czech goods and there's a growing services demand.  There's also been an increase in self employment and entrepreneurship.

This is all good news.  On the flip side, it's getting more and more difficult for employers to find workers.  Even for low qualified positions.  It's creating wage pressure as well.  Difficulty finding people and at higher wages will become a major obstacle for continued economic growth.

Czechland currently has the lowest unemployment rate in the EU.  Followed by Germany, Hungary, Malta and the UK.

At around 23%, Greece has the highest unemployment rate in the EU.  Ahead of Spain, Cyprus, Italy and Croatia.

Update:  New record-low unemployment in Czechland.