Despite a significant decline in year-on-year inflation from 6.9% to 2.3% in January and optimistic forecasts of rising minimum wages, many Czechs are gearing up for a year of savings. A survey conducted by Provident Financial reveals that 69% of respondents intend to scale back their visits to restaurants and pubs as part of their saving strategies.

Petr Javůrek, Chief Analyst at Provident Financial, notes that while respondents harbor slight optimism about their financial prospects for the year, they remain cautious and inclined towards saving. The survey underscores a widespread intention among Czechs to tighten their belts, with 78% planning to reduce spending on food purchases, followed by 70% intending to limit visits to eateries and leisure establishments, and 66.3% planning cutbacks on leisure, sports activities, and holidays.

Analysis of savings behavior over the past two years reveals that individuals aged 27 to 35 have been the most diligent savers, particularly in areas such as grocery shopping, toiletries, wardrobe updates, and social outings. Notably, respondents in this age group were 10 percentage points more likely to save on clothing and shoe purchases compared to the national average. Conversely, the youngest respondents aged 18 to 26 exhibited the least propensity for saving, albeit still reducing expenditures on clothing and shoes by 16 percentage points less than the 27-35 age category.

Regional disparities in saving habits were also observed, with residents of the Zlín Region leading in savings on food and clothing, while those in Prague made fewer savings in these categories. Additionally, individuals in the Karlovy Vary Region were most inclined to restrict visits to catering facilities, with three-quarters of respondents indicating such measures.

Despite the prevailing inclination towards saving, a significant portion of the population continues to struggle with saving habits. More than 27% of respondents admitted to saving nothing from their income, while nearly half of those who do save set aside less than a quarter of their earnings. Javůrek emphasizes that regular savings, especially among socially vulnerable groups, can pose a formidable financial challenge in times of economic instability.

In terms of demographics, individuals in the 45-53 age group exhibit the highest propensity for savings, with nearly three-quarters regularly setting aside a portion of their income. Conversely, individuals aged up to 35 demonstrate the lowest savings behavior, with over half admitting to saving nothing. Moreover, the survey indicates that men tend to outpace women in savings habits, with over 76% of men regularly setting aside income compared to 66% of women.

Article by Prague Forum