The overall confidence indicator, which measures economic sentiment in the Czech Republic, fell by 1.4 points to 93.7 in August, according to the latest figures from the Czech Statistical Office, published earlier this week. Both business and consumer confidence showed a downward trend.
The business confidence indicator dropped by 1.5 points to 93.0 in August, with a particularly sharp decline in the service sector, where confidence fell by 4.3 points. There were also declines in trade (-2.6 points) and construction (-2.4 points). Only the industry sector recorded an increase in confidence, rising by 1.6 points, though this is seen as a slight correction to the significant decline observed in the previous month.
Jiří Obst, Head of the Economic Survey Department at the Czech Statistical Office, explained: “Confidence in the economy fell in August across all sectors except industry. The service sector, including the financial sector, is particularly suffering from expectations of a decline in demand in the coming months.”
Consumer confidence also continued its downward trend, falling by 1.1 points to 97.3. The number of people expecting the general economic situation to deteriorate over the next twelve months rose significantly compared to the previous month. Although the assessment of their own financial situation remained almost unchanged compared to the previous twelve months, expectations of an improvement in the coming months declined slightly.
Anastasija Nejasova from the Economic Survey Department commented on the consumer situation: “Consumer sentiment has fallen for the fourth month in a row. Around a third of households report struggling to make ends meet with their current financial resources, and less than ten percent are relying on savings or credit.”
The current decline in the overall confidence indicator reflects growing concern among both businesses and consumers about the future economic development in the Czech Republic.
