Prices are falling for a large number of foods. However, we may still experience price increases in some cases. However, according to experts, there should be no threat of a rapid increase in prices, as was the case last year. Despite this, Czechs save more, which is reflected in the sales of merchants.
The Czech Statistical Office (ČSÚ) regularly publishes how the average price of basic food has changed each month. And the data is quite optimistic, because in many cases the situation is improving.
Compared to January of this year, it has become cheaper butter, by 58 crowns per kilogram. However, it is important to note that in previous months the price was even much lower than it is now. We also pay far less for Edam. We pay 51 crowns less for a kilogram of brick.
Average consumer food prices in 2023 | Source: CZSO
On the contrary, we mostly pay extra for pork roast, when a kilogram costs about ten crowns more. They have also gone up in price since the beginning of the year potatoesby approximately seven crowns per kilogram.
But according to economists, we should be over the worst. “If the basic scenario is fulfilled, that there will be no significant aggravation of geopolitical tensions, it can be assumed that the development of the Czech economy will lead to a reduction of inflation to reasonable values,” said TN.cz economist Pavel Peterka.
However, several factors can also slow down the decline in inflation. “A change within the consolidation package may come into play in some way. The regulated component of the electricity price will increase. At the same time, payments for renewable sources will return, which will slow down the decline in energy prices. And they may even rise,” added Peterka.
Czechs save more
Retail sales in September fell by four percent year-on-year. Compared to August’s 2.8%, this is an acceleration. At the same time, retailers’ sales have been falling for the 17th month in a row. Experts agree that food is one of the items on which Czechs save far more.
“Retail sales, adjusted for price effects, remained lower year-on-year even in September. The pace of year-on-year decline deepened compared to the previous month due to a decrease in sales of non-food goods and food. On the contrary, sales growth was maintained by the sale of fuel,” said the head of the Department of Trade and Transport Statistics and services of the Czech Statistical Office (ČSÚ) Jana Gotvaldová.
According to experts, people save most at the expense of unnecessary goods and services, but not exclusively. “The slowdown in inflation is not yet sufficient to force households to restore their former consumption habits,” economist Jiří Pour is clear.
However, the drop in inflation could help. “As early as next year, inflation should return to its target, which will allow real wages to rise. Thanks to this, businessmen’s sales will begin to increase and the Czech economy will revive. However, the inflationary episode caused enormous damage to our economy and significantly reduced the standard of living of the majority of the population,” concluded economist Štěpán Křeček.
Many Czechs get into debt without knowing it. You will learn more in the following report (10/2023):