Czechs still embracing carpe diem philosophy

15-11-2003

Czechs are in the throes of a shopping fever. Fourteen years of a Western lifestyle have not sated people's urge to buy and buy some more. Few people need an excuse but if you do there is always some reason - the Christmas shopping season now starts in October - then come the New Year sales and then Easter is just around the corner. A growing number of shopping malls beckon on any day of the year, and for many families they have become a weekend shopping oasis. The fact that most people still cannot afford the pricey products they yearn for makes little difference. Banks are falling over themselves offering credit. Never has it been so easy to get a loan. Banks do not request guarantors, and in many cases people don't even need to go to the bank - they can request a loan over the phone or Internet and get the money delivered to their doorstep within 24 hours. On average every third Czech aged between 25 and 40 has taken out a loan. Christmas has become a huge consumers' feast and this year it will be better than ever. Czechs are planning to spend a lot of money on it - and borrow an additional twenty billion crowns to tide them over. People have learned to appreciate quality and there is now a big demand for quality and luxury items, a highly satisfied salesman told journalists recently.

Although buying on credit is perfectly normal, economists are now expressing concern that Czechs may be overdoing it. The Central Bank has issued repeated warnings that the indebtedness of Czech households is growing too fast. In less than two years the number of loans has doubled and economists say there's a real danger that people may not be able to keep up with payments or repay the money at all. The International Monetary Fund has also expressed concern that Czech banks may not be assessing their clients' credit rating very well. But for the present time no one is paying much attention to such dire warnings. The shops are chock full of luxury goods and the Czech Republic is soon to join the elite club of EU nations. What better reason to celebrate? Already, citizens in the Czech Republic have more mobiles, computers and cars per head than people in other candidate countries. As EU members they will need newer mobiles, newer computers and newer cars. And if it takes a loan to get them - so what? The rule of the day is: enjoy now, pay later.

15-11-2003