Czech Republic: Economic sentiment falls in June

The economic sentiment indicator published by the Czech Statistics Office (CSO) fell from May’s 96.0 points to 95.3 points in June. The result marked the lowest figure in eight months and came on the back of a decline in both business and consumer confidence. The decrease brings the index further below its 100-point long-term average.

Business sentiment inched down from May’s 94.3 points to 93.5 points in June. Sentiment was worse in the industry component, which saw the largest decrease in comparison to the construction, trade and service components. Respondents felt there would be a decrease in production activity over the next three months, which dragged on industrial sentiment.

Consumer confidence fell in June to 103.8 from 104.3 in May. The decrease reflects that consumers have become more concerned over a deterioration in their overall economic situation in the next 12 months, although, the Czech Republic’s strengthening labor market was a source of optimism for consumers.

FocusEconomics panelists expect private consumption to expand 2.9% in 2016, which is unchanged from last month’s projection. For 2017, the panel sees private consumption growing 2.6%. Panelists see fixed investment increasing 1.0% in 2016, which is unchanged from last month’s projection. For 2017, panelists expect fixed investment to expand 3.1%.