Czech Republic: Economic sentiment decreases in March

The economic sentiment indicator published by the Czech Statistics Office (CSO) fell from February’s 97.1 points to 96.7 points in March. The result marked the second consecutive drop, following January’s multi-year high, and came on the back of moderations in both consumer confidence and, albeit to a lesser extent, business sentiment. Thus, the index remained below its 100-point long-term average.

Business sentiment inched down from February’s 95.3 points to 95.1 points in March. Sentiment dropped notably in the construction sector while sentiment in the industry and trade sectors recorded moderate declines. Conversely, sentiment in the services sector increased.

Consumer confidence fell from February’s 106.2 points to 104.8 points in March. This decline mainly reflects that consumers turned more pessimistic regarding the general economic outlook. While consumers’ saving capability decreased slightly, their concerns about their own financial situation, unemployment and price increases were broadly unchanged.

FocusEconomics panelists expect private consumption to expand 2.7% in 2016, which is down 0.1 percentage points from last month’s projection. For 2017, the panel sees private consumption growing 2.6%. Panelists see fixed investment increasing 2.1% in 2016, which is down 0.3 percentage points from last month’s projection. For 2017, panelists expect fixed investment to expand 3.3%.