In June, there was a real year-on-year decrease in retail sales by six percent. People continue to significantly reduce their consumption for the second month in a row. It can be assumed that the postponed pandemic consumption has already been largely realized. Due to high inflation, people also realized part of their future consumption in order to avoid a sharp rise in prices.
A decrease in the sales of merchants portends that people are preparing for the coming of hard times. The reduction in consumption will slow down the pace of economic growth, so it is possible that a recession will break out in the Czech economy. In the end, this could significantly reduce inflationary pressures, however, during the recession, people’s living standards will fall.
Sales fell the most in specialized stores with clothing and footwear, products for culture, sports and recreation, or computer and communication equipment. Fuel sales fell by 7.6 percent and food sales by 5.5 percent. On the contrary, sales growth was recorded by stores with pharmaceutical and medical goods or cosmetic and toilet products.
The author is chief economist at BH Securities
(Editorially modified)
