All analysis from category Macro comment
Macro comment
Retail sales in October: the biggest drop since the start of the pandemic
Retail sales fall for the sixth month in a row in annual comparison. The drop of nearly ten percent is the biggest since the pandemic began in 2020, but then much of the economy was shut down; now the reason is different. Czech households are seeing their living standards fall at a record pace through high inflation and they are having to cut back significantly on their consumption. Retail sales excluding motor vehicles fell by 1.8 per cent month-on-month, both calendar and seasonally adjusted. On a year-on-year basis, retail sales fell by 9.4 per cent on a calendar-adjusted basis.
Macro comment
Wages in Q3: Significant real decline continues
One of the main characteristics of the economic developments this year is undoubtedly the significant real wage decline, which is lowering the living standards of most households and reducing their willingness to spend in shops, restaurants and on services. In Q3, the average gross wage in the Czech economy increased by 6.1 per cent year-on-year to CZK 39 858, but due to high inflation, the real value of the average wage decreased by 9.8 per cent.
Macro comment
State budget for November: relatively decent result
In January-November, the central government ran a deficit of CZK 337 billion, while in November alone the deficit was CZK 50 billion. The twelve-month balance currently stands at CZK 355 billion.
Macro comment
PMI in November: no improvement in conditions in sight
Business conditions in November are significantly below the neutral 50-point threshold indicating a decline in corporate economic activity. On a month-on-month basis, they were virtually stagnant, with the seasonally adjusted manufacturing purchasing managers' index falling from 41.7 points to 41.6 points compared with October. This is the lowest reading since the start of the pandemic in 2020. No major improvement is expected in the outlook. What are the reasons for the decline?
Macro comment
Consumer prices in October: Administrative reduction in inflation
Consumer prices had been rising very rapidly for a number of months and finally fell in October. This was helped by the introduction of an electricity savings tariff. The consumer price index fell by 1.4 per cent month-on-month. Year-on-year inflation slowed from 18.0 to 15.1 per cent.
