Czech Republic: Economic sentiment improves for second month in a row
February 24, 2012
The February economic sentiment indicator published by the National Statistics Office inched up to 87.9 points from 87.2 points in January, which represents the second consecutive monthly improvement and the highest level since October 2011. Despite the improvement, however, the index remains 6.3 points below the level observed in the same month last year. The February rise reflected an improvement in the business confidence sub-indicator, whereas the consumer confidence sub-index declined over the previous month. Accordingly, a majority of firms assessed their current business situation as more favourable, while their business expectations for the next three months also improved over the previous month. Improving business confidence therefore bodes well for investment going forward. On the other hand, consumer confidence declined in February following January's improvement. Respondents to the February survey displayed more concern that the general economic situation will worsen in the next 12 months. Consumers also assessed their own financial situation more pessimistically compared to the previous month. Finally, fewer respondents expect unemployment to increase.
Author: Ricardo Aceves, Senior Economist