Business News

Decline in mortgage loans, say banks

The Czech Republic has seen a decline in mortgage loans by a fifth according to top banks operating in the country. Whilst between January and June in 2007, banks lent Czechs around 74 billion crowns, for the same period this year, the figure has fallen to 59.5 billion. A number of factors are believed to be behind the decline, including the fact that last year represented a peak brought about by expected changes in VAT tax laws. This led many Czechs to quickly get mortgages or even buy land on which to build houses. Since the early 1990s, when the current mortgage system was introduced, banks have lent approximately 529 billion crowns to 373,000 customers.

Czech 16th largest beer producer

New data from the Czech Agriculture Ministry along with the Hopsteiner Company indicates that the Czech Republic was the 16th largest beer producer in the world in 2007, just behind Canada and Venezuela. China tops the list, while the United States comes in second. According to the data, the Czech Republic is responsible for 1.1 percent of the world’s total beer production and 3.4 percent of European production, with a total of 19.897 million hectolitres of beer produced in 2007. Meanwhile, Czech beer exports continue to rise, from 10.4 percent of production in 2001, to 18.5 percent last year. The figures are expected to climb in future years as the country further increases production.

GDP forecast scaled back, but prognoses show cause for optimism

The Czech Finance Ministry has lowered its GDP growth estimate for the Czech Republic by several fractions of a percentage point. The new projections predict 4.6 percent growth – revised from 4.9 percent, while new 2009 figures predict 4.8 percent growth. The predictions signal moderate faith in the Czech Republic’s economic strength, which has so far resisted the trend of the global economic slowdown – although this too has been evident in the Czech Republic. However, a number of key indicators remain of concern, primarily high inflation and the strong crown. Currently, OECD figures put Czech inflation forecasts at 6.8 percent, with a very optimistic fall to 2.7 percent by 2009. Unemployment is also expected to fall to 4.3 percent this year and 3.9 percent by 2009.

Report finds suspicious investment by government Czech Forest Company

A report by public broadcaster Czech Television has found what are believed to be irregularities in the business practices of Lesy ČR or Czech Forests, a state owned company that manages forests in the country. According to an investigation by the station, Czech Forests are placing hundreds of millions of crowns into private funds without informing its own oversight committee or the Ministry of Agriculture. The funds are then freely being used to invest in financial markets. Experts cited by the station stated that such investments are both risky and lack the required transparency. Czech Forests has denied any irregularities sating that these actions comply with their operating procedures.

Finance Ministry to keep an eye on heating costs

Photo: Europea Commission The Czech Finance Ministry has announced that as of January it will replace the current watchdog and directly monitor how energy companies charge for heating services across the country. The current watchdog, the Energy Regulatory Office (ERU), operates from the Industry and Trade Ministry and has agreed to the shift. There have been frequent complaints that heating bills are too high in the country and insufficient oversight it partly viewed as the cause. These findings were confirmed by a Chamber of Deputies report, which also found that prices are up to four times higher in some areas while the structures of heat distributors' costs lack transparency. The new Finance Ministry oversight is expected to address these concerns.