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Prague – Confidence in the Czech economy fell this February from 92 points in January to 91.7 points. This was due to a decline in the confidence of entrepreneurs. Consumer confidence, on the other hand, has increased, even to the highest level for the past year. This follows from the data published today by the Czech Statistical Office (ČSÚ). Among entrepreneurs, the decline was noted in industry and trade. According to analysts, the data indicate weak economic growth or a continuation of the recession.
Overall, entrepreneurs' confidence in the Czech economy decreased by 1.3 points in February compared to January to a value of 92.5. While it rose to 106.2 points in construction and 94.6 points in selected services, it decreased to 94.4 points in trade and even fell to 88.7 points in industry. “February confidence of entrepreneurs in industry fell to the lowest value since June 2020. Companies in selected segments of industry expect a more significant slowdown in the growth rate of production activity and also a decrease in employment,” said Jiří Obst, head of the CZSO's economic research department.
In contrast to business confidence, the consumer confidence indicator increased by 4.8 points to 87.7 points. The last time it was higher was just a year ago, i.e. last February. “Similarly to January, most of the monitored indicators recorded a month-on-month improvement. However, consumer sentiment as a whole still remains well below its long-term average,” said Anastasija Nejasova from the CZSO's economic survey department.
The number of households assessing their current financial situation worse than in the previous 12 months was almost unchanged in February compared to January. However, according to statistics, the number of consumers expecting a worsening of their financial situation in the next 12 months has significantly decreased month-on-month. Compared to January, households are also less worried about the deterioration of the overall economic situation. The share of consumers who believe that the current time is not suitable for making large purchases also decreased slightly month-on-month.
According to Jakub Seidler, Chief Economist of the Czech Banking Association, the CZSO's data sound mixed. “Households are starting to see the current economic situation less negatively. Confidence among businessmen has decreased only in industry, but prospects in all monitored segments regarding the future have, on the contrary, significantly worsened,” he said. “There is still no change in the fact that the first half of this year will be marked by weak growth, fears of a recession and risks that inflation will ultimately be higher than current estimates predict,” he added.
“Overall, the results of confidence in the economy are unfavorable and indicate a continuation of the recession that began in the second half of last year. Only a rapid retreat of inflation or an influx of new orders to companies can reverse this trend. Neither is very likely for the coming months,” says the Bank's chief economist Creditas Petr Dufek.
Comparison of confidence indicators in the economy of the Czech Republic:
|Indicators< /td>||February 2022||January 2023||February 2023|
|Total entrepreneurs||100.7||93 .8||92.5|
Source : CZSO