- Hans Weber
- December 1, 2023
Czechs Unhappy with High Inflation Rate, Anticipate Further Currency Depreciation
According to a recent survey conducted by the Czech polling agency CVVM, the high inflation rate experienced last year was deemed unacceptable by three-quarters of Czechs. The survey results shed light on the financial challenges faced by citizens as the inflation rate reduced the real income of many households. Additionally, the majority of respondents anticipate further currency depreciation in the coming year, with a significant proportion predicting a substantial decline.
The inflation rate, which dipped below 10% in June, marked the first time in a year and a half but remained notably higher than acceptable levels for the Czech public. The impact on purchasing power has been significant, with 68% of respondents stating that their household income now buys less than it did a year ago. Only a mere 4% of respondents believed that their current income affords them the ability to purchase more than they could in the previous year.
The perception of real household income development has been on a downward trend since 2013, reaching a historical low. Those who previously considered their standard of living good reported a 60% reduction in income, while those living in households experiencing a poor standard of living reported an 80% income reduction.
Comparing the recent survey with a previous one conducted in mid-2022, which examined inflation for 2021, it becomes apparent that the situation has significantly worsened. The percentage of people considering inflation unacceptable has risen by 35 points, while those finding it somewhat acceptable have fallen by 32 points. CVVM noted that this is the worst result since 1993, when the survey began.
Moreover, the future outlook appears bleak, as 78% of respondents expect further currency depreciation, and 35% anticipate a noticeable decrease in purchasing power. Inflation expectations have been deteriorating since 2016, peaking last year and surpassing the worst result from 2008. Although the current result shows some improvement compared to last year, inflation expectations remain worse than any time before 2013.
The high inflation rate and the anticipation of currency depreciation highlight the financial concerns of Czech citizens and their pessimism about the economic situation. Such sentiment calls for policy measures and economic strategies to address inflationary pressures and ensure stability and economic well-being for households in the country. It also emphasizes the importance of public awareness and understanding of economic conditions to navigate the challenges posed by inflation effectively.
Article by Prague Forum