Record dearness. After petrol or beer, Czechs also pay extra for electricity

Cars, on the other hand, are more expensive due to stricter emission limits as well as chip supply outages, also caused by the coronavirus crisis. Kovanda therefore expects the Czech National Bank to try to curb inflation this year by raising its key interest rate twice.

According to BHS chief economist Štěpán Křeček, people whose employers do not increase their wages pay the most for the price increase. In addition, he fears that the conditions for providing mortgages and other loans will deteriorate. Conversely, money in savings accounts will lose value the fastest due to inflation. He therefore expects them to try to invest them more than ever before. “Stocks, real estate, gold or cryptocurrencies can be popular,” Křeček estimates.

Other “jams” to the budget

InfographicsSource: DiaryBut many people can do without alcohol or tobacco. However, all households without distinction can probably expect further unpleasant “jams” in their budget already in the autumn. “The focus of inflation will gradually begin to shift to sensitive items such as food and housing costs, especially for electricity,” warns Akcenta analyst Miroslav Novak.

Electricity prices have been driven up by rising spending on emission allowances, so they are almost as high as they were at their all-time high. This happened in 2008 just before the global financial collapse. “Prices on the stock exchange have been rising for a whole year, so we do not have good forecasts for electricity prices,” analyst Jiří Gavor told Deník. According to him, emission allowances will no longer become more expensive, but the rising price of electricity will reflect the announced slowdown in German nuclear power plants and, with it, the lower energy supply on the market.

While electricity has become extremely expensive in international markets, it will only be reflected in consumer costs gradually and with a delay. First, suppliers bought the energy they use today in advance at a lower price. In addition, the greater part of the price of electricity, which concerns its transmission and distribution, is determined by the Energy Regulatory Office.

Gavor expects that he will increase it only minimally, so the total price increase can be about ten percent. “We can expect everyone to pay about as much as we would have one extra monthly payment,” Gavor estimates.

Extremely uncertain situation

Analyst Petr Woff advises people to enter into cheap fixed contracts instead of the usually advantageous contracts for an indefinite period. “That is, with a guarantee that the supplier will not raise the market price at least until the end of 2022,” he told Deník Woff.

However, according to him, the situation in the coming years is extremely uncertain. According to Woff, it will depend on the development of climate, technology and the situation in Germany after the local elections.

“If tornadoes and floods become more frequent, if coal-fired power plants cannot be effectively replaced and the Greens rule in Europe, demand may outweigh subdued supply,” Woff fears. “Then poorer citizens will spend the heating season in sweaters,” he added.

– .