Most Czechs are shrugging off the global financial turmoil ahead of the fast-approaching Christmas shopping spree, but growing worries in the corporate sector suggest they should be on alert.
On Friday, statisticians said consumer confidence in the economy grew by 0.7 points last month against a month earlier, in stark contrast to a 6.6-point contraction in business confidence.
“Consumers should probably show some fear, but they haven’t so far,” Next Finance analyst Marketa Sichtarova said.
Instead, Czechs were filling shops, open seven days a week and often till late at night, in a chase for Christmas presents, ignoring the financial crisis that has forced employers throughout the former communist country to cut both production and jobs.
“Consumers still see real incomes grow, while companies are confronted with falling demand above all from abroad,” Sichtarova said.
Poor demand in western Europe, a key market for Czech exporters, has forced Czech producers such as the country’s largest car maker Skoda Auto to announce production cuts or, worse, job cuts affecting thousands of people.
The center-right coalition cabinet has been taking the crisis in its stride so far, pointing to the healthy banking sector. But this week it said it was working on a rescue plan and planning to boost labor market flexibility.
Czech Prime Minister Mirek Topolanek also said the Cabinet would like to “create room for low interest rates through fiscal and economic policies in order to boost investment and exports which are threatened the most by the cooldown.”
Over the past month, 21 companies have announced layoffs, planning to sack 9,000 people because of falling demand and as a step to prevent the impact of the looming crisis, the Hospodarske noviny daily wrote on Wednesday.
This Christmas will be especially sad for the 1,250 staff of Bohemian crystal maker Sklo Bohemia, which wound up a month ago, sacking whole families that had worked at the company for decades.
Czech unemployment may climb to 6.7 percent next year from 5.2 percent in October because of the crisis, the CTK news agency wrote, citing analysts.
International organizations have revised their growth forecasts for the Czech Republic downward, saying they expect a contraction this year and next year after a record-high 6.6 percent economic growth last year.
The IMF expects the Czech economy to grow by less than 2 percent next year, down sharply from a previous forecast of 4 percent. The European Commission predicted a slowdown to 3.6 percent.
“We have to get used to slower economic growth and to a more difficult economic situation,” said Patria Finance analyst David Marek, adding “companies will not raise wages next year, which is a clear result of the financial crisis.”
Still, the ordinary shopper seems careless as Christmas draws nearer. An average Czech is planning to spend about half of the average monthly wage on Christmas presents and delicacies, surveys showed.
AIR SUPPORT: The Ministry of National Defense thanked the US for the delivery, adding that it was an indicator of the White House’s commitment to the Taiwan Relations Act Deputy Minister of National Defense Po Horng-huei (柏鴻輝) and Representative to the US Alexander Yui on Friday attended a delivery ceremony for the first of Taiwan’s long-awaited 66 F-16C/D Block 70 jets at a Lockheed Martin Corp factory in Greenville, South Carolina. “We are so proud to be the global home of the F-16 and to support Taiwan’s air defense capabilities,” US Representative William Timmons wrote on X, alongside a photograph of Taiwanese and US officials at the event. The F-16C/D Block 70 jets Taiwan ordered have the same capabilities as aircraft that had been upgraded to F-16Vs. The batch of Lockheed Martin
GRIDLOCK: The National Fire Agency’s Special Search and Rescue team is on standby to travel to the countries to help out with the rescue effort A powerful earthquake rocked Myanmar and neighboring Thailand yesterday, killing at least three people in Bangkok and burying dozens when a high-rise building under construction collapsed. Footage shared on social media from Myanmar’s second-largest city showed widespread destruction, raising fears that many were trapped under the rubble or killed. The magnitude 7.7 earthquake, with an epicenter near Mandalay in Myanmar, struck at midday and was followed by a strong magnitude 6.4 aftershock. The extent of death, injury and destruction — especially in Myanmar, which is embroiled in a civil war and where information is tightly controlled at the best of times —
Taiwan was ranked the fourth-safest country in the world with a score of 82.9, trailing only Andorra, the United Arab Emirates and Qatar in Numbeo’s Safety Index by Country report. Taiwan’s score improved by 0.1 points compared with last year’s mid-year report, which had Taiwan fourth with a score of 82.8. However, both scores were lower than in last year’s first review, when Taiwan scored 83.3, and are a long way from when Taiwan was named the second-safest country in the world in 2021, scoring 84.8. Taiwan ranked higher than Singapore in ninth with a score of 77.4 and Japan in 10th with
China's military today said it began joint army, navy and rocket force exercises around Taiwan to "serve as a stern warning and powerful deterrent against Taiwanese independence," calling President William Lai (賴清德) a "parasite." The exercises come after Lai called Beijing a "foreign hostile force" last month. More than 10 Chinese military ships approached close to Taiwan's 24 nautical mile (44.4km) contiguous zone this morning and Taiwan sent its own warships to respond, two senior Taiwanese officials said. Taiwan has not yet detected any live fire by the Chinese military so far, one of the officials said. The drills took place after US Secretary