Confidence in the Czech economy dropped slightly in December, with both entrepreneurs and consumers expressing increased pessimism compared to the previous month, according to the Czech Statistical Office (ČSÚ). The overall confidence indicator fell by 0.5 percentage points month-on-month to 97.5 points, though it remains higher than a year ago, when it stood at 93.8 points. Among entrepreneurs, confidence declined by 0.4 points to 96.9 points. According to Jiří Obst, head of the ČSÚ’s business survey department, this drop was primarily driven by reduced demand in the industrial sector and lowered expectations for production growth over the next three months. Confidence in the industrial sector fell significantly, by 2.4 points, while the construction sector’s confidence remained steady compared to November. Confidence in selected service sectors rose by 1.5 points, and trade confidence increased slightly by 0.4 points. Consumer confidence also saw a decline, dropping by 1.2 points to 100.4 points in December. This marks a partial correction following three months of growth. Anastasija Neradová from the ČSÚ’s business cycle survey department attributed the decline to heightened concerns about the overall economic outlook and an increasing reluctance among households to make major purchases in 2025. The share of consumers anticipating a worsening of the economic situation in the next 12 months rose slightly, while expectations of an improved financial situation remained largely unchanged from November. However, there was a slight decline in the number of households that assessed their current financial situation as worse than in the past 12 months. Meanwhile, the proportion of consumers who view the current time as unsuitable for large purchases increased in December. The December data reflects ongoing uncertainty in the Czech economy, with a cautious outlook from both businesses and households as they navigate potential challenges in the year ahead. Source: ČSÚ and CTK