At the turn of the year, two government measures came into force to help combat the coronavirus crisis and boost household consumption. The measures consisted of a one-time payment to all old-age, disability and survivors’ pensioners and the elimination of super-gross wage and related tax adjustments. This study shows that both of these measures can have a strong impact on household consumption due to their widespread effect. According to our calculations, higher pensions should lead to a temporary increase in household consumption of almost 2%, and in the case of the tax reductions, to a sustainable increase in consumption of up to 3.4%. But given the high degree of uncertainty and the closure of the economy, the current situation might hinder consumer spending in terms of either total expenditure and/or amount spent over time.

Economic confidence deteriorated again in January in the Czech Republic as a result of stricter measures against Covid-19. Household confidence and retail sales have been impacted the most, while industrial confidence broadly stagnated and remains close to pre-pandemic levels