Jan 24 (Reuters) - Czech consumer confidence rose in January to its highest level since March 2022, a statistics office survey showed on Tuesday, suggesting that signs inflation is peaking are helping sentiment in a shrinking economy.
The statistics office's confidence indicator rose to 82.9 in January, up from 75.5 in December. The record low is 72.7, hit last October.
Business confidence also ticked up in January, the data showed.
"January surveys of consumers and business confidence support our expectations that the Czech economy can stabilise in the first quarter after quarterly drops in the second half last year," Radomir Jac, chief economist at Generali Investments CEE, said.
Analysts and the central bank expect the economy to have dipped into a mild recession at the end of 2022, as double-digit inflation and soaring electricity bills sapped household spending power and encouraged people to put off purchases.
Retail sales have dropped for seven-straight months, according to the latest data releases up to November.
The rise in Czech confidence follows a similar increase in sentiment amongst Polish shoppers.
Despite the rise in January, Czech consumer confidence remains well below past readings. It was at 92.7 last February, before Russia's invasion of Ukraine, which has triggered huge fluctuations in energy markets, helping propel already hot inflation. Consumer confidence in mid-2021 was at its highest since before the COVID-19 pandemic hit in early 2020.
The statistics office said many components were still below long-term averages, while 28% of households said they were having trouble making ends meet and 10% were reaching into savings or borrowing. ** Click here for an interactive graphic:
(Reporting by Jason Hovet in Prague; Editing by Sharon Singleton)
