Boston, MA -- (SBWIRE) -- 06/28/2012 -- The Czech Republic Retail Report examines the long-term potential of the local consumer market, but flags short-term concerns about the impact on the country's economic outlook of high unemployment and ongoing fiscal austerity.
The report examines how best to maximise returns in the Czech retail market while minimising investment risk, and also explores the impact of the increasingly precarious looking eurozone macroeconomic environment on the Czech consumer and on the ability of producers and exporters to realise returns in the short term.
The report also analyses the growth and risk management strategies being employed by the leading players in the Czech retail sector, as they seek to maximise the growth opportunities offered by the local market.
Czech per capita consumer spending is forecast to stand at US$9,949 in 2012, compared with US$7,031 for the region as a whole. The country comes second (out of 10) in BMI's Central and Eastern Europe (CEE) Retail Risk/Reward Ratings, and notably outperforms for Risk.
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Among all retail categories, consumer electronics will be the outperformer through to 2016 in growth terms, with BMI forecasting sales to expand by almost 21%, from US$4.46bn in 2012 to US$5.38bn by 2016. Per capita consumer electronics spending is forecast to grow by at least 19% to US$513 by 2016 as sales of digital products increase.
In the competitive arena, BMI sees upside potential in the fact that an influx of EU funds will help boost spending on computers and help drive information society development.
Over the last quarter, BMI has revised the following forecasts/views:
- BMI is forecasting the Czech Republic to experience real GDP growth of 0.1% in 2012, down from 1.7% in 2011. While we expect the same dynamics that have driven the economic recovery to remain dominant with growth coming from net exports and investments, the weakening external environment and continued uncertainty regarding the eurozone sovereign debt crisis will mean that contributions from these components of real GDP moderate in 2012.
- BMI highlights that the Czech consumer continues to be held back by high unemployment and ongoing fiscal austerity. The unemployment rate ticked up in January 2012 to 9.1% from 8.6% the previous month, and BMI now expects the joblessness rate to remain elevated in 2012, forecasting an average 8.3% in 2012, down from 8.6% in 2011.
- Trading conditions in the retail sector continue to be challenging. According to the Czech Statistical Office (CZSO), retail sales in the first two months of 2012 contracted on an annual basis by a working day-adjusted 0.5% in January and 1.6% in February. The figures were held back by lower food sales, which continued to fall on the back of a 4.0% rise in the lower rate of VAT.
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