Czechs saving where they can as they brace for energy crunch
With inflation at over 17 percent and energy prices expected to go through the roof in the autumn, economizing has become the order of the day for the vast majority of Czechs. According to polls, eighty percent of Czechs are feeling the crunch, a third of them “very strongly”.
Soaring prices have made the vast majority of Czechs review their expenditures and lower-income households, among them seniors and single parents, are increasingly having problems making ends meet. According to a STEM poll, close to 70 percent of respondents have cut back on spending.
The vast majority of people are cutting back on food, mainly by actively looking for discounts and stocking up on basic products whenever they can buy them cheaper. Two thirds of people polled said they were no longer eating out as often, or forking out as much money on sports, culture and travel.
Jaromír Mazák from the STEM agency says the crisis is unprecedented in the country’s modern history.
“In our survey 60% of respondents say that the economic situation of their household has worsened in the past year and this is the highest number in the past 30 years. We know that 20 to 25% of households are not able to save any money, so if their energy bills double or rise even more it will be a big challenge for them to restructure their budget accordingly. But it is also middle-income families who face difficulties because a lot of Czechs took hefty mortgages on the wave of optimism in the good years before the Covid pandemic and now they are watching the situation with concern.”
Three quarters of respondents are concerned about the impact of inflation on their budgets and one in four Czechs say they are saving money to cover increased energy costs during the winter season. According to the Median polling agency, nine out of ten Czechs expect to have to tighten their belts even more in the coming months. A third of Czechs polled are either moonlighting or looking for a second job.
What may be a surprising aspect of these surveys is Czechs’ apparent unwillingness to give up the comfort of their warm homes. Czechs are known to heat their homes well, and in a recent survey for IKEA, 49 percent of respondents said that they did not want to change this.
Around 42 percent of people polled said do not plan to lower the temperature in their homes at all, while 29 percent are willing to lower it by just one degree.
Thirty-nine percent of respondents said they are willing to lower the temperature when they are not at home or in the night hours. Only 6.5 percent of respondents plan to lower the temperature in their home significantly, as requested by the government.
Most Czechs said they would prefer to save on new clothes and electronics rather than lowering the temperature in their home. Many of those living in the country are turning back to fossil fuels and there has been a scramble to stock up on wood and coal.
Moreover, in connection with the crisis, a growing number of Czechs feel the government should be spending less on environmental protection and more on social benefits in order to protect people from falling into poverty.
Data from the leading Czech bank Česká spořitelna, indicate that seven percent of Czech households have no financial reserves whatsoever and a third have reserves that would last them for less than one month. Fifty-seven percent of Czechs have already started to dip into their savings.
Over 65 percent of Czechs polled by STEM said they feared falling into poverty or a significant drop in their living standard. Jaromír Mazák again:
“Many people are concerned about the future, because so far we haven’t really seen much of an increase in unemployment, but people may assume that this can go up in a non-linear fashion if large companies default. I think there is a lot of pessimism about the economic outlook in the Czech society.”