The Development of Household Consumption in the Czech Republic in the Period 2002 - 2011

The thesis is focused on evaluation of the household consumption development in the Czech Republic in the period 2002 -- 2011. The objective of this work is to delineate main factors of decision-making of households on savings and on consumption in the period of economic boom and in the period of economic crisis. It is pointed out that the key determinant of the decision-making were primarily expectations. This factor contributed to a rapid consumer credit growth in the period of economic boom. In the period of economic recession, a considerable worsening of expectations (unemployment, further fiscal policy decisions) led households to gradual precautionary savings despite the year-on-year decrease in growth of nominal disposable income. Moreover, since 2011, the nominal disposable income declined. This analysis also shows that the factor of expectations influenced household behaviour more than the factor of banks' interest rate policy. This fact was notably evident in the recession when commercial banks responded to the change in rates of the Czech National Bank by lowering their consumer credit interest rates in a lesser extent. However, in this uncertain period of prudent stance of both banks and households, the consumer credit growth slowed down, moreover, it decreased in 2011. This piece of knowledge about this important role of expectations in the period of a great uncertainty that results in building up precautionary savings is indicated also by research papers from abroad.