Czech Republic: Economic sentiment rebounds after hitting lowest level in three and a half years
May 24, 2013
The economic sentiment index published by the Czech Statistical Office rose to 83.3 points in May from 81.9 points in April, which had represented the lowest level in three and a half years. That said, despite the improvement, the index still sits 2.0 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 May. Business confidence rose in May, reflecting firms' less pessimistic business prospects in the coming months, particularly in industry and trade. FocusEconomics panellists anticipate fixed investment to drop 0.1% this year, which is down 0.3 percentage points from last month's projection. For 2014, panellists expect investment to expand 2.7%.
In the meantime, the consumer confidence sub-indicator jumped to its highest level in two years, reflecting consumers' more optimistic view of the general economic situation in the next 12 months, while their assessment regarding their own financial standing also improved. Meanwhile, households showed less pessimism about developments in the labour market and expressed more willingness to buy durable goods.
FocusEconomics Consensus Forecast participants anticipate 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