• Every seventh Czech got into debt during the crisis.
• Food was the second item for which they borrowed, after energy. Czechs lead in European shopping during sales.
• Payment for utilities like energy, water, and rent is a priority for Czech respondents.

Are Europeans facing financial difficulties?

In the last six months, one in five Europeans got into debt. Although inflation in the Czech Republic is among the highest, Czechs borrow significantly less often (14%) than the Eastern European average (23%). The primary reasons for borrowing were heating and electricity costs. This was found out by a February study conducted by EOS among 7,700 consumers in 13 European countries. Among other things, it emerged that Czechs prioritize payments for energy, water, and rent the most.

Expenses for heating and energy were the primary reasons for a quarter of Europe's new debts in the last six months. Due to these costs, 24% of Germans, the highest among Western European countries, incurred debt. Every third Czech also mentioned energy as the main reason for their debt, aligning with a mild Eastern European average. Surprisingly, 26% of Czech respondents also used loans to finance food expenses. Unlike other countries, food constituted the second most frequent reason for new debts among Czechs. Only Germans (27%) in Western Europe showed a similar inclination, significantly exceeding both Eastern (20%) and Western (16%) Europe's average debt due to food.

Czechs tighten their belts – they won't buy what they don't need.

"Czechs are very price-oriented, with 63% of us considering prices even in everyday purchases, putting us high above the average along with Hungarians and Romanians. But where we absolutely excel is in sales. As the survey confirmed, almost six out of ten Czechs shop during sales, which is a European uniqueness. In the last six months, Czech consumers have also cut back the most—40% of respondents stated they're spending less," specified Vladimír Vachel, managing director of EOS KSI, s.r.o., behind the study.

However, Europe, as per the survey results, is saving, and consumers across all countries had to give up something. From the list of planned expenses, the most commonly cut were travel, dining out, cultural and leisure activities (33%). Czechs tightened even more, reducing expenses for these unnecessary items by up to 45%. More than a third of Czechs also gave up buying clothes, and every fourth person doesn't indulge in small daily pleasures they could afford before.

First energy, then a roof over the head.

When it comes to regular payments, respondents in all countries considered payment for energy and water the most crucial and would pay for them as the first expense. The second most crucial payment for Europe is rent, averaging at 61% of respondents. Having a roof over their heads is even more urgent for Czechs—82% of respondents marked it as a priority expense. For example, in Hungary, the ratio is nearly half lower, and rent payment is less prioritized compared to, say, paying bills for phone and internet.

Inflation scares three-quarters of the Old Continent.

Inflation was the main reason for saving and newly incurred debts for every second European. Czechs also perceive inflation and its associated higher prices as the main driver of debt but in a lower volume (43%). Slovakia is similar, with 4 out of 10 respondents in debt due to inflation. "Although Czech consumers don't cite inflation and its associated price rise as frequently as the rest of Europe, they're equally fearful. Inflation is a future bogeyman. Its height affects the financial stability and living standards of Europeans, hence three-quarters of all respondents mention it as a source of fear. The most concerned are in Hungary (84%) and Serbia (82%). Expensive energy and high bills also cause concerns about financial future for every second European," adds Libor Ťupa, financial director of EOS KSI s.r.o.

About the EOS Survey "Europeans in Financial Difficulty? EOS Consumer Study"

In collaboration with Dynata, a specialist in online surveys, EOS conducted an online survey between February 3 and 9, 2023, among 7,700 consumers in 13 European countries. The survey focused on how the past six months influenced participants' consumption habits and financial situations.

EOS KSI Czech Republic, s.r.o.,

The EOS Group is a leading technology-based investor in debt portfolios and an expert in open debt processing. With over 45 years of experience and operations in 24 countries, EOS offers intelligent services to approximately 20,000 customers worldwide, primarily from banks, real estate, telecommunications, energy companies, and the e-commerce sector. EOS employs over 6,000 persons and is part of the Otto Group.

Contacts

AMI Communications, spol. s r.o.: Týn 641/4, Prague 1, Růžena Černíková, email: [email protected], tel.: 777 185 199, www.amic.cz

EOS KSI Czech Republic, s.r.o., Managing Director Vladimír Vachel, email: [email protected], tel.: 241 081 123, www.eos-ksi.cz