Economy of Communist Czechoslovakia

Economy Of Communist Czechoslovakia

In the mid-1980s, Czechoslovakia was the most prosperous country in the Eastern Bloc. Although levels of consumption were well below those common in Western Europe, inhabitants of Czechoslovakia enjoyed a standard of living generally higher than that found in most other East European countries. Heavily dependent on foreign trade, the country nevertheless had one of the Eastern Bloc's smallest international debts to non-communist countries.

The Czechoslovak planned economy possessed serious structural problems. Like the rest of the Eastern Bloc economies, producer goods were favored over consumer goods, causing consumer goods to be lacking in quantity and quality in the shortage economies that resulted. Economic growth rates lagged well behind Czechoslovakia's western European counterparts. Investments made in industry did not yield the results expected. Consumption of energy and raw materials was excessive. Czechoslovak leaders themselves decried the economy's failure to modernize with sufficient speed.

The differing statistical concepts and procedures used by communist and non-communist economists make assessment of the status of the Czechoslovak economy complicated. Foreign trade statistics are particularly difficult to assess because a variety of currency conversion methods were employed to calculate trade turnover value. Data calculated on the basis of non-communist concepts will be identified here by the use of such Western terms as gross national product; Czechoslovak statistics will be called official data or identified by such terms as net material product or national income.