Have higher prices made Prague a ghost town?
Just about a month ago, Prague's streets were packed with tourists and locals, the public transport system was filled with passengers and shops and stores were almost overwhelmed by the large number of customers. Now, the Golden City has become a ghost town. Some may think it's a normal occurrence, the tourists have gone back home and Czechs have had more than their fair share of the holidays and are now ready to get back to their normal lives. But many, including myself, can't help but notice that the city is much quieter than usual at this time of the year.
With all the New Years' sales going on, why aren't Czechs shopping, or just taking walks in the beautiful winter days, stopping at a local pub or café for a drink? The simple reason is because they can no longer afford to and now have to think twice before spending a few crowns on a beer or a warm drink. Czechs have begun avoiding places and things that could tempt them into spending money.
During the months of November and December, the main topic of discussion was Czechs finally being able to shop 'till they drop. Thanks to credit cards and appealing loans, businesses enjoyed record numbers of sales all around the country. Christmas gifts for friends and family were bigger than usual and electrical appliances such as mobile phones and home theatres were top of the list when it came to personal treats. A significant percentage of goods bought were on credit, hoping that expected wage increases in 2004 would cover the sums owed.
But what people did not take into account was the fact that any rise in salaries that this year could bring will in most cases not make up for the mass increase in VAT - from 5% to 22% - on numerous goods and all services that was introduced on January 1st 2004. Besides alcohol and cigarettes, basic necessities such as the telephone, petrol, and most goods are much more expensive this year. All these add up, resulting in bills far higher than many had calculated. The press is full of articles with advice on what to do to save money - get a different tariff system for your phone, never call at peak-times, change your bank accounts, follow your bank statements carefully and think of a suitable monthly budget, stop smoking, and the list goes on.
We're just about to get into the third week of 2004 and Czechs are already regretting their shopping sprees. Two months of spending bliss will now force them to turn into misers for the rest of the year.
