Page 43 - CE Outlook Regions 2023

3.0 Real economy outlook

3.1 Real economy - Czech Republic

3.1.1 Retail

The retail sector has been hit by the fall in household income. The
situation of households is deteriorating as rising inflation is causing a
fall in real income for most households. The country’s real wages are
set to drop by 8.3%, the steepest decrease in all Visegrad (V4)
countries as well as considerably below the EU average drop of 2.3%,
an analysis by investment and consulting company Cyrrus showed in
November.

Due to the soaring inflation Czechia is also projected to see a decline in
real wages by 0.1% next year. In comparison, real wages are expected
to grow by 0.6% on average in the EU, which is also the case in the
remaining V4 countries.

A significant drop in real wages was seen in the figures for 3Q 2022
when the gross monthly nominal wage increased by 6.1% compared to
the previous year, but in real terms it decreased by 9.8%, which is the
same decrease as in the previous quarter.

3.1.2 Banks

Worsening real incomes of households could also be felt in the banking
sector in 2023, but they were offset by the impact of rising net interest
margins, with large banks recorded profits based on incomplete results.
Moneta expects to exceed the 2022 forecast results, and profits were
recorded by UniCredit Bank, Ceska Sporitelna (Erste), Komercni Banka
(Societe Generale), and CSOB (KBC) driven by the high interest rate
environment.

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