Up to 200,000 Czechs may fall into poverty due to the epidemic

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Up to 200,000 Czechs could fall into poverty and social exclusion as a result of the coronavirus epidemic, according to the Agency for Social Inclusion.

The Czech Statistical Office (CZSO) stated that 9.5 percent of the Czech population was at risk of income poverty before the start of the pandemic, which translates to about a million people.

The agency’s calculation was based on data from previous years on gross domestic product (GDP) growth and poverty rates. According to statistics, GDP fell by 5.6 percent last year. It was the largest decline since the establishment of the independent Czech Republic.

“If the current relationship between the change in GDP and the poverty rate corresponds to the trend observed in the period of GDP growth, then with the economy declining by five to six percent, the share of these [poor] people can be expected to increase by one to two percent which is from 100,000 to 200,000 people,” said Roman Matoušek, the agency’s data analyst.

A person is at risk of income poverty if he does not have even 60 percent of the median net income. Last year, this limit for individuals was CZK 13,640 (€526) per month. In the previous year, it was CZK 822 lower.

For two adults, last year’s income was at the poverty line at CZK 20,460 (€ 89) a month. For a single parent with a small child, it was CZK 17,732 (€684), for parents with two smaller children CZK 28,644 (€1,104), and with three children CZK 38,192 (€1,473). The CZSO collected the data last spring, so it still reflects the situation before the start of the epidemic. At that time, the share of people below the income poverty line fell from 10.1 to 9.5 percent year-on-year.

The agency points out that with a higher number of people in poverty, spending on benefits in material need can increase, even by tens of percent compared to the time just before the pandemic. The number of unemployed people is increasing and many self-employed people have closed their businesses. Household income has fallen.

“According to our surveys, in 2020, 84 percent of the population of socially excluded localities could not afford the unexpected expenditure of CZK 12,000 (€462). We can expect another deterioration of the already alarming situation,” said agency director David Beňák.

According to agency researcher Adam Duffek, the pandemic stopped the positive trend of previous years.

“Those who have slowly managed to find better forms of accommodation are now ending up on the streets again. Prostitution is on the rise, especially for women who worked in casinos or bars before the pandemic. The demand for services for drug users is also growing. More and more people who have managed their situation before are asking for food aid,” Duffek described.

Title image: Anna Svrcinova, a homeless woman, sits in an abandoned factory that served her as a shelter during a cold night in Prague, (AP Photo/Petr David Josek)

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