Czech Republic: Economic sentiment improves for second consecutive month
June 24, 2013
The economic sentiment index published by the Czech Statistical Office rose to 83.8 points in June from 83.3 points in May. Although the reading represents a second consecutive improvement, the index still sits 0.8 points below the level observed in the same month last year.
The monthly improvement was broad-based, with both the business and the consumer confidence indicators advancing in June. Business sentiment rose in June fuelled by firms' less pessimistic business prospects in the coming months, particularly in trade and selected services. FocusEconomics panellists see fixed investment falling 0.1% this year, which is down 0.3 percentage points from last month's projection. For 2014, panellists expect investment to rebound and expand 2.7%.
Meanwhile, the consumer confidence sub-indicator jumped to its highest level since April 2011, reflecting households' less pessimistic view of the general economic situation in the next 12 months. In addition, consumers' assessment regarding their own financial standing remained unchanged. On the other hand, households showed more pessimism about developments in the labour market, whereas a larger number of respondents expressed more willingness to save money than to purchase major goods.
FocusEconomics Consensus Forecast participants expect private consumption to contract 0.2% in 2013, which is down 0.2 percentage points from last month's projection. For 2014, the panel sees private consumption growing 1.4%.
Author: Ricardo Aceves, Senior Economist