romea - logo
June 27, 2022



Martin Mata: Save your money, the pandemic will have an overwhelming economic impact

21.4.2020 10:23
Martin Mata, director of the Ústecký Region's Center for Innovation in the Czech Republic, interviewed for ROMEA TV. (April 2020)
Martin Mata, director of the Ústecký Region's Center for Innovation in the Czech Republic, interviewed for ROMEA TV. (April 2020)

Martin Mata, director of the Ústecký Region's Center for Innovation in the Czech Republic, holds a Master's of Business Administration from the Institute for Management Economics. How does he see future economic developments after the crisis caused by COVID-19?

What recommendations does he have for business people and ordinary households? Richard Samko interviewed him on these and other questions for ROMEA TV.

The COVID-19 pandemic and the measures associated with it are having a macroeconomic influence globally. "This is causing trouble for the stock markets, which basically are responding, whether that be the commodities markets or the stock markets. The volatility there, how it's jumping up and down, is terribly high. Some stocks have fallen to a value of one US dollar. That is absolutely unbelievable," Mata said of the impact COVID-19 is having macroeconomically.

"The current crisis can be compared to the economic problems in 1918, when the flu epidemic broke out. Families should handle their finances judiciously. Saving money in the correct way is appropriate. The current state of affairs may intensify in the autumn and could be an even bigger problem for the economy," he said.

The Czech state is doing its best to aid and support business people who are currently experiencing big profit losses and who do not have enough financing for their operations. Mata said there is an opportunity to take out a COVID-related loan in the Czech Republic, but also warned of the risks such indebtedness entails.

"The only opportunity today is the COVID loan, but that is oversubscribed at the moment. However, even if business people do assume this particular loan today, they will still be at risk. It means you're already in debt today. This indebtedness is not because of an investment, which means you don't have any added value from it. This indebtedness is for operations, which means you will have to make up later for what you have encountered now. Going into the future with such a debt is a terribly dangerous thing," he warned.

Mata recommends five financial management principles that apply to anybody, including during normal times. "If you have the opportunity, and you have the money, then save it, just put it away. The second rule is that of 50, 30, 20. There should be 50 % for my costs - rent, housing, food, etc. There should be 30 %, if possible, that I reserve for things like vacation and stuff I want to buy. Then 20 % - I don't say 10 % anymore - if possible, should be left in reserve. Another principle is that I should have an amount in reserve that is six times my income. On the other hand, if I wanted to cover my costs 20 times over, that means I must have reserves that are so large that I could pay off 12 months of loans. It is important to save money in the correct way," he said, recommending people contact financial advisors for advice on how to handle finances and household expenses.


th, vhl, sam, translated by Gwendolyn Albert
Views: 572x

Don't miss:

Related articles:


Ekonomika, Finance, Krize, Osobnosti


More articles from category

romea - logo