Czech household spending surged by nearly 14% last year, but when adjusted for inflation, it became evident that Czechs were getting less for their money.
Statisticians have confirmed what many Czechs experienced firsthand in the past year: they were leaving stores with more money spent but fewer goods in their baskets.
In 2022, the annual consumer spending per person in Czech households reached CZK 180,773 or CZK 15,064 per person per month. This marked a 13.7% increase compared to 2021. However, when accounting for a 15.1% price increase in 2022, real household spending declined by 1.2%.
The most significant long-term expenses were housing and energy, making up 23.4% of spending in 2022, followed by food and non-alcoholic beverages at 19.4%. In contrast, education and health accounted for the smallest shares of household expenditures due to free or subsidized services in these areas compared to other countries.
Price hikes significantly impacted household spending. Energy costs rose by 15.5% in 2022, primarily driven by higher electricity, gas, and coal expenses. Fuel expenditures saw a 33.5% increase in 2022.
Táňa Dvornáková, head of the Social Surveys Department of the Czech Statistical Office, noted that households gradually resumed spending on activities like recreation, culture, sports, and dining out in 2022 after cutting back due to pandemic restrictions.
However, the financial strain on Czech households continues into 2023, as seen in the country’s retail trade data. Retail sales have been declining for over a year, a trend that stands out compared to the period before the crisis.
In June 2023, Czechs purchased nearly 5% fewer goods compared to June 2019. This drop is among the largest in Europe, with only Italians reporting a slightly smaller decline (3.6%). In contrast, consumption in other countries has remained stagnant or increased.
The food category saw the most significant reduction in consumption among Czechs, with purchases decreasing by more than a tenth due to high prices, a unique trend in Europe. This poses a risk to low-income families who allocate a significant portion of their budget to food and are forced to cut back on essential purchases.