Czech economic sentiment declines in January as consumer confidence weakens

The Czech Republic’s composite confidence indicator, which measures overall economic sentiment, declined slightly in January, falling by 0.3 points to 97.4, compared to the previous month. The downturn was driven primarily by a decline in consumer confidence, which dropped by 3.4 points to 97.1, while business confidence showed a marginal improvement, rising by 0.4 points to 97.5, according to the latest data.

Within the business sector, sentiment varied across industries. Confidence in the industrial sector saw a notable increase of 4.3 points, reflecting optimism about production and demand. However, confidence declined in other areas, with selected service sectors experiencing a drop of 3.4 points, the construction sector falling by 1.8 points, and trade sector confidence stagnating at -0.8 points.

Consumer confidence, in contrast, weakened for the second consecutive month. The share of consumers who expect the overall economic situation to worsen over the next twelve months saw a slight increase. Similarly, an increasing number of households anticipate a deterioration in their financial situation over the coming year, with more consumers reporting a worse financial position compared to the previous twelve months.

Despite growing concerns about future economic conditions, consumer attitudes towards major purchases remained relatively unchanged, with the proportion of respondents viewing the current period as unfavorable for significant expenditures staying stable.

Overall, the decline in economic sentiment reflects lingering uncertainty among Czech consumers, while the business sector remains cautiously optimistic in certain industries. Economic analysts will closely monitor future developments to assess whether business confidence gains can offset the persistent concerns among households.

Source: Czech Statistical Office