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Consumer gloom despite positive signs

Hundreds of cars and thousands of people with carriages full of goods could be seen after the largest and newest shopping park in Slovakia Aupark opened two weeks ago.
By looking at the crowds in stores like Aupark one might presume that consumer confidence is on the rise, however Slovaks are generally sceptic about the overall economic situation.
The latest survey carried out by the Slovak Statistics Office suggests that 17% of the Slovaks will make big purchases, including washing machine, fridge, furniture etc., but more than two thirds of the population believe that the economic situation has worsened over the last year.


The grand opening of the Aupark shopping centre in Bratislava drew nearly 9000 shoppers.
photo: TASR


"When we ask them, many say that the situation is gloomy, but their monthly salaries show something else."

František Szabo of the Statistics Office


Hundreds of cars and thousands of people with carriages full of goods could be seen after the largest and newest shopping park in Slovakia Aupark opened two weeks ago.

By looking at the crowds in stores like Aupark one might presume that consumer confidence is on the rise, however Slovaks are generally sceptic about the overall economic situation.

The latest survey carried out by the Slovak Statistics Office suggests that 17% of the Slovaks will make big purchases, including washing machine, fridge, furniture etc., but more than two thirds of the population believe that the economic situation has worsened over the last year.

Although the 17% figure has been the highest since 1997 when the surveys started, more than 50% of the respondents except economic conditions to worsen over the next 12 months.

Both analysts and sociologists say that the contradictory messages coming from the population show that the economic situation has progressed, but not enough to impact on the opinions of generally pessimistic Slovaks.

"The national sport of Slovaks is deep pessimism. Slovaks are sceptical even when they are better off," said Ján Bunčák, sociologist with Comenius University in Bratislava.


Retail turnover is up and a further boost to the sector is expected in 2002.
photo: Spectator archives

"When we generally look at all economic indicators we see that the situation has improved, but the improvement hasn't been too dramatic," said Ľudovít Ódor of the Slovak rating agency.

According to the survey the figure for the number of people planning big purchases which in October this year stood at 17% had been 13% in the same period of 2000.

The increase was followed by a growth in household consumption as well as retail turnover.

While in the third quarter of 2000 there was 1.9% drop in the household consumption, in the first quarter of 2001 there was 4% increase continuing with a further 1.7% increase in the second.

The retail turnover grew by 1.7% in July 2000 but in the same month of this year growth already stood at 4%.

Representatives of the Institute For Public Surveys at the Statistics Office, who carried out the survey, also said that economic reality was not often reflected in the answers people gave in the surveys.

"When we ask them, many say that the situation is gloomy, but their monthly salaries show something else," said František Szabo, the head of the institute.

Although real wages dropped significantly in 1998 when the current government pushed up prices of gas, power, water and transport, the economy has been growing since the fourth quarter of 2000, something that has been reflected in a growth in real wages.

While real wages decreased by 3.1% in 1999 and 4.9% in 2000, they are expected to increase by 0.9% in 2001 and by a more significant 4.7% in 2002.

A further boost in 2002 is also expected in household consumption as the National Property Fund privatisation agency is paying out dividends from the second wave of voucher privatisation at a value of Sk13, 629 ($282) to each person who bought a coupon for Sk1,000 in the mid 1990s.

Added to that, the government did not increase the gas prices for households by 19.3% as it had originally intended.

Analysts say they do not understand why people expected an economic slowdown in 2002 when all economic indicators showed the opposite.

"I don't understand the pessimism of Slovaks," said Tomáš Kmeť, an analyst at SLSP bank.

But Bunčák said he knew the answer: "Slovaks are reluctant to accept that they may be better off. It is not socially acceptable to say this."

"No one knows where this is coming from, but it is deeply rooted in our culture."

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