Czech shoppers shrug off crisis while employers struggle

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PRAGUE, Nov 30 (AFP): Most Czechs are shrugging off the global financial turmoil ahead of the fast-approaching Christmas shopping spree, but growing worries in the corporate sector suggest they should be on alert.
On Friday, statisticians said consumer confidence in the economy grew by 0.7 points in November against a month earlier, in stark contrast to a 6.6-point contraction in business confidence.
"Consumers should probably show some fear, but they haven't so far," Next Finance analyst Marketa Sichtarova told AFP.
Instead, Czechs are filling shops, open seven days a week and often till late at night, in a chase for Christmas presents, ignoring the financial crisis that has forced employers throughout the former communist country to cut both production and jobs.
"Consumers still see real incomes grow, while companies are confronted with falling demand above all from abroad," said Sichtarova.
Poor demand in western Europe, a key market for Czech exporters, has forced Czech producers such as the country's largest car maker Skoda Auto to announce production cuts or, worse, job cuts affecting thousands of people.
The centre-right coalition cabinet has been taking the crisis in its stride so far, pointing to the healthy banking sector. But this week it said it was working on a rescue plan and planning to boost labour market flexibility.
Prime Minister Mirek Topolanek also said the cabinet would like to "create room for low interest rates through fiscal and economic policies in order to boost investment and exports which are threatened the most by the cooldown."
Over the past month, twenty-one companies have announced layoffs, planning to sack 9,000 people because of falling demand and as a step to prevent the impact of the looming crisis, the Hospodarske noviny daily wrote Wednesday.