It might seem that at the level of price increases that the Czech Republic is currently experiencing, people will resort to a more prudent use of their money. Simply put, they will start saving. However, we do not see this yet, although inflation breaks records and is one of the highest at the European level.
Interest does not subside
It is clear that Czech households generally have significant savings and reserves. This actually justifies the price increase, because at the time of service and goods at last year’s prices were too cheap for people. This then deflects demand, which in turn is not enough supply. This is usually what will cause prices to rise.
It is therefore quite possible that the market has so far only moved to an equilibrium position and may not have reached it yet. Retail sales show that people’s interest in shopping does not slow down much.
It’s just another name for what economists have been saying for some time. Namely, that too much money got into the Czech economy, especially in the form of state aid for most people and especially by abolishing the super-gross wage, which improved absolutely everyone, and especially those who did not need it at all.
It will continue to rise in price
This created space for higher prices, which traders used and increased their prices. This, of course, they do not present themselves. We hear talk of rising costs, etc. This is partly also true, but a look at other countries in Europe shows that this factor has played a much lower role. In our country, people simply had more money in their hands at once. And to this must be added the record savings in banks.
Many traders just tried it and increased the prices really significantly. If people reacted by stopping shopping, the situation would probably start to normalize. But they didn’t stop walking. And this is a clear impetus for traders: we can continue to raise prices. This will keep going until the customer says enough. Usually because he’ll find it expensive.
Foto: Shutterstock
–
