Most Czechs are experiencing a decline in their standard of living

Rising food, energy, and services prices are increasingly affecting Czech households’ lifestyles and purchasing behavior. The vast majority of people perceive a decline in their standard of living. They are therefore addressing their situation by cutting back on spending, buying less, or focusing on cheaper goods.

According to a survey conducted by Ipsos for Creditas, the deterioration in the overall state of the Czech economy is perceived by virtually every Czech (98 percent).

This is also reflected in the living standards of households. Seven out of ten respondents have already experienced a decline, half of them even an extreme decline. A quarter of people have not yet had to cut back but are already anticipating a declining standard of living.

Inflation also significantly affects housing-related costs such as rent, mortgage payments, and energy bills. Only a fifth of people mentioned that there had been no changes in their households, mainly since they have fixed prices.

However, other respondents said they had seen an increase in costs. One-fifth of respondents pay a maximum of CZK 1,000 more per month; one-third pay CZK 1,000 to 3,000 more; another fifth pay CZK 3,000 to 5,000 more; and nine percent pay CZK 5,000 or more per month.

More for housing, less for clothes

The bank’s data shows that in a year-on-year comparison, households are spending 10 percent more on food than a year ago, while clothing has fallen by two percent, and spending on other purchases has fallen by 1.5 percent.

Total expenditure related to transport rose by 4.5 percent. The most significant growing item is services, which showed an increase of 124 percent, mainly related to the new level of advance payments, such as electricity.

Cheaper goods as a suitable alternative

About half of the respondents react to rising prices in shops by buying cheaper goods. More than a quarter continue to buy the same interests in limited quantities, while another 17% have not yet restricted their purchases but are already considering alternatives. Around one in two have also reduced their visits to restaurants or the use of other residual services.

This year alone, the number of orders at second-hand or second-hand shops selling refurbished computers and older phones is up by an average of 20 percent. Experts at ShopTet believe this trend will continue and that the entire segment will grow by tens of percent in the coming year.