Czech Republic: Economic sentiment plunges to lowest level in two years
December 27, 2011
The economic sentiment indicator published by the National Statistics Office dropped from 86.6 points in November to 85.0 points in December, which represents the lowest level seen since December of 2009. Owing to the monthly drop, the index now sits 10.8 points below the level recorded in the same month the previous year. The December fall reflected declines in both sub-indicators, particularly in the consumer confidence component, which plunged to its lowest level in over a decade. A majority of firms continue to take a pessimistic view of the current economic situation. Moreover, businesses lowered their expectations for the economic situation in next three months. According to the December survey, a higher number of businesses expect that economic activity will slow in three months ahead and consequently anticipate a decrease in total demand. Meanwhile, consumer confidence continued to deteriorate in December and fell to its lowest level since September 1999. A majority of consumers are now more afraid than last month that the general economic situation will worsen in the year ahead. Moreover, respondents to the December survey assessed their own financial standing more pessimistically compared to the previous month and a higher number of consumers also expect a rise in unemployment.
Author: Ricardo Aceves, Senior Economist