Czech Republic: Economic sentiment continues to deteriorate
September 26, 2011
In September, the economic sentiment indicator, published by the Czech Statistical Office, fell to 87.6 points from 89.6 points in August, marking the lowest level since March 2010. The index now sits 4.1 points below the level registered in the same month last year. However, according to the Statistics Institute, economic sentiment remains above crisis levels. The drop in September was broad-based, as both sub-components of business and consumer confidence deteriorated over the previous month. The decline in business confidence reflected a more negative assessment about the economic situation in the next six months as well as lower expectations for an increase in total demand, particularly in the trade and services sectors. Consumer confidence eased slightly over the previous month, but now sits at levels seen during the financial crisis in 2009. The reading reflected consumers' growing fears that the economic situation will worsen in the next year. Consequently, consumers assessed their own financial situation more negatively compared to the previous month. In addition, the September survey saw more respondents expecting an increase in unemployment.
Author: Ricardo Aceves, Senior Economist