A study by the Czech Economic Chamber (HK) has revealed that living standards in Czechia have doubled since the 1989 Velvet Revolution, with average wages 14 times higher than during communist rule and prices sevenfold on average. The key change was price liberalisation after the fall of communism when product shortages ended. Despite price rises since the late 1980s, purchasing power has grown, with people now able to use 50% more kilowatt hours of energy for the same amount of money compared to 1989.

Czechia ranks in the world’s top 20 'freest’ economies, thanks to mass economic reforms in the 1990s that ushered in a free-market system and helped propel growth. Entrepreneurship boomed, with registered businesses increasing from under 180,000 in 1990 to nearly 3 million entities today, 2 million of which are self-employed. Czechia has closed the gap with Germany’s GDP per capita by over 13 percentage points, though it still lags due to economic struggles seen in recent years.

However, a separate survey by the Czech polling agency STEM/MARK revealed that many Czechs do not feel an increase in living standards. Only 56% of people said they have a better standard of living compared to the pre-1989 period, with 54% saying job opportunities were better before 1989. Additionally, almost half of people believed living costs had sharply increased since 1989, and over two-fifths felt food quality has declined since 1989.

Economic reforms, market liberalization, and EU membership have fueled robust economic growth. Rising incomes, increased job opportunities, and access to a broader range of goods and services have enhanced the quality of life. Infrastructure development, improved healthcare, and educational advancements contribute to a higher standard of living. Czechia’s transition to a market economy has brought about positive changes, fostering prosperity and well-being for its citizens.

However, in recent years, economic growth has been stagnant and there are worried voices which believe that Czechia has entered the so-called middle income trap.