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Czechs accused of 'Saving too Much' |
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Tuesday, 16 February 2010 |
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Czech consumers' move to increased saving was hurting the country's economy, a local newspaper said on Monday.
According to Hospodarske Noviny, Czech people are showing less desire to spend than normal and their average savings have been growing.
"Households have a good reason to be careful," the newspaper wrote, noting that unemployment had reached an all-time record of almost 10 percent.
Retail sales dropped 1.9 percent in December, the 15th consecutive monthly fall, compared with a 4.7-percent decline in November, the Czech Statistical Office said.
Even profitable companies have decided to cut spending, according to the newspaper.
"The building industry has not hit the bottom, yet, and probably it won't hit it even this year," said Dan Tok, director of Skanska, the largest construction company in the country.
Nevertheless, many big projects had been postponed, not only by private investors, but also by the government, the paper said.
Moreover, the current financial problems of Greece and other EU countries are pushing the value of the euro down, which might lead to further economic losses for Czech export industries, it added.
Lower spending adds to the woes of the country's Finance Ministry, which will see a record budget deficit this year, as lower spending means less income from consumption taxes.
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