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Prague – the Heart of Europe

Prague is the capital of the Czech Republic and its largest city. With its more than one million inhabitants, it accounts for 12% of the country’s population. This makes it the natural centre of politics, international relations, education, culture and the economy. In the EU context, Prague ranks among the advanced regions.

Since 2001, when a new administrative division was introduced, Prague has been divided into 22 administrative districts. From the self-administration point of view, it consists of 57 autonomous town quarters with their own elected representative bodies.

Statistical Data

Source: Czech Statistical Office

Economic Potential

From the economic point of view, Prague enjoys an exclusive position within the framework of the Czech Republic, with most financial institutions, foreign firms and all the main state administrative authorities being based there. All this substantially influences Prague’s economy, which generates nearly one-quarter of the national gross domestic product (GDP) on a long-term basis. The Czech Republic’s accession to the EU in 2004 had a favourable effect on the economy of the whole country, especially as the terms and conditions of trade with EU states improved. Per capita GDP in Prague significantly exceeds the value for the CR as a whole (220.4% in comparison with the national average), as well as the EU average (177% in comparison with the EU27 average). Higher GDP generation is typical for capital cities. This is due to a number of factors, such as the higher level of wages, commuting employees who create added value in Prague, the localisation and registration of companies in the city, the localisation of foreign branches of supranational firms and the concentration of central bodies of both the public and private sectors.

Prague and its broader environs offer an unprecedentedly large extent of land for business purposes, suiting the specific needs of domestic, as well as foreign investors. This includes industrial parks, industrial development parks, manufacturing facilities, office space, brownfields and other commercial property. In general, the authorities support the development of industrial parks and other real estate development and brownfield regeneration, realising that good quality commercial property is the key to success in attracting foreign investments.

Economic performance is closely linked with the situation in the labour market. Prague is the largest regional labour market in the Czech Republic. The characteristic features of the current development are the high localisation attractiveness of the Prague labour market on the one hand and the capital’s capability of meeting growing demand on the other hand. The reasons are the considerable professional mobility of internal resources and the still rapidly growing supply of out-of-Prague and foreign workers. Thanks to the offer of a wide range of specialisations, the Prague labour market has managed to absorb nearly all the labour force made available in the process of transformation and practically all newcomers. More than 30% of the employed are university graduates and their number is growing steadily. Average wages in Prague are also higher than in the other regions. Another characteristic feature of the Prague labour market is the below-average unemployment rate.

Prague’s tertiary sector (services) currently accounts for more than 80% of the country’s total added value. The employment rate in this sector in Prague also largely exceeds the figures of all the other regions. In 2010, nearly 82% of all those employed in Prague worked in the services sector, in comparison with 77% in 2001. On the other hand, the share of the manufacturing branches in added value creation and employment is distinctly smaller in Prague and is below the national average. In Prague, the industry sector does not hold such an important position as it does in other regions.

Construction is another sector affected by the crisis. Although Prague has a leading position as regards the volume of basic construction output and building work, 46% of structures billed in Prague are built in other regions (2010). In addition, the number of building permits issued is gradually declining and so is the number of completed apartments. The volume of construction work in enterprises with 20 and more employees has also declined.

An important component of Prague’s economy is tourism, where the favourable rising trend also continued in the 1^st quarter of 2012, showing a massive growth. There was a total of 954 470 visitors to Prague in the first three months of the year (January – March 2012), who spent 2.52 nights there on an average. Year-on-year, the number of guests increased by 16%. The structure of foreign tourists remains unchanged. The Czech Republic’s standard source markets are Germany, Russia, Italy, the United Kingdom, France and the USA, followed mainly by the European states. The first quarter of the year saw the largest number of Russians (103 791) arriving in the CR, 36.7% more than last year. Russian visitors are among those who stay for the longest period in Prague.

Prague also has an important position in other spheres of social life, such as education, healthcare and culture. It can be said that Prague is the country’s educational centre, with a high concentration of schools starting at the secondary educational level. Prague has the largest number of grammar schools and secondary vocational schools of all the regions, and its position in the area of higher learning is quite exceptional. In the 2010/2011 academic year, 146 500 students were enrolled at its 32 universities in all types of courses and their number is showing a moderate increase.

Air transport, both passenger and cargo, is operated in particular by the Prague-Ruzyně Airport, which in 2011 processed 11.79 million passengers (11.72 million of whom were foreigners). A new terminal, North 2, opened in January 2006, from which all flights to countries of the Schengen Area are operated.

Tourism

Prague, City of a Thousand Spires, the Mother City, Magical Prague. These three attributes are frequently used to characterise the capital city of the Czech Republic. Since the very beginnings of the Czech state, Prague has been its natural political, commercial and cultural centre. This historical, and at the same time modern, city is more than 1000 years old. It has a remarkable charm that captivates in all seasons. In recognition of its value, the city has been included in the UNESCO World Heritage List. What makes Prague’s historical centre so interesting? This is its general appearance: narrow winding lanes opening up into small squares dominated by sacred structures, the most ancient of which date back to the Romanesque era. The Old Town, however, is mainly Gothic, with magnificent Gothic churches and sumptuous burghers' houses, adding to the appearance of the "Stony Prague". In other places, Renaissance palaces adorn the streets and squares, while elsewhere visitors can admire the Baroque and Classicist styles. Those favouring modern architecture will be surprised by the exquisite examples of Art Nouveau, Cubism and Functionalism. All this combines into one whole, which needs days to explore. A special sight is the River Vltava with its bridges. The oldest and the most popular is Charles Bridge, built in 1357 by the Czech King and Holy Roman Emperor, Charles IV, who was also responsible for the current layout of Prague. The pious ruler perceived Prague as the European parallel to the Holy City of Jerusalem.

Prague Castle dominating the skyline is an unparalleled historical sight. Since time immemorial, it has been the seat of the supreme authority of the Czech state. Today, the Castle, called “Hradčany”, the world’s largest castle compound, is the seat of the President of the Czech Republic. The Castle itself, together with the St. Vitus Cathedral, is one of the symbols of the Czech nation and, at the same time, the country’s most visited tourist attraction. It is a medieval architectural treasure admired by visitors from all over the world. In fact, the earliest settlers came to live in the Prague river valley as far back as the Later Stone Age.

It does not matter when you decide to visit Prague. It will charm you whether you arrive in spring—when everything is in blossom and you take the cable car up to Petřin Hill to admire the city from the top of Prague’s Eiffel Tower—or at any other time. Prague's beauty will enthral you even on a drizzly autumn day, when the historical lampposts are submerged in fog and you are not certain whether you have perhaps found yourself in a completely different century.