In Business News this week: the Finance Ministry revises its growth prediction for the Czech economy upwards; the government delays a sale of international bonds because of uncertainty in the wake of the Greek debt crisis; Škoda Auto sees its profits increase by over 500 percent in the first quarter; agribusiness tycoon Andrej Babiš says the EU is destroying the Czech food industry; and Czechs spend twice as much of their income on booze and tobacco products as the average EU citizen.
Ministry says economy set to grow more than previously expected
The Czech economy will grow more this year than had been expected previously, the Ministry of Finance said this week. It revised its growth outlook for 2010 gross domestic product to 1.5 percent, up from 1.3 percent. The ministry said that exports should increase thanks to economic recovery in its main trading partners in western Europe. It forecast growth of 2.4 percent in 2011.
Government delays bond issue as Greek crisis creates uncertainty around euro
The Czech government is delaying a sale of international bonds in the wake of the Greek debt crisis. Prague says it will wait until conditions are better before selling the bonds, which are in euros. Finance Minister Eduard Janota told reporters on Wednesday that the country was not under pressure to sell. He had said on April 6 that the one- to two-billion-euro sale of bonds would likely take place within a month, and some analysts suggest the Czech government may have waited too long.
Škoda Auto sees profit increase of over 500 percent in first quarter
The biggest manufacturer in the Czech Republic Škoda Auto saw its profits increase by a whopping 562 percent year-on-year in the first quarter of 2010. That jump has been largely attributed to the fact the car market was doing so poorly in the first three months of 2009, as the financial crisis hit sales. And all is not rosy in Škoda’s garden just yet: an executive told its trade union magazine that the company’s plants were not at full capacity and nearly 700 full-time employees would be let go this year.
EU not playing fair with Czech food producers, says magnate Babiš
Billionaire Andrej Babiš, the most important man in Czech agri-business, launched a stinging attack on the European Union this week. The Agrofert owner said the EU was destroying the country’s food industry by not creating a level playing field. Mr Babiš said Brussels allowed some members to export their products into the Czech Republic freely, while at the same time hitting the Czech agri-business with restrictions, like forcing Czech meat producers to spend huge amounts to meet standards not required in older EU states.
Cigarettes and alcohol form relatively large part of Czechs’ outgoings
The average Czech spends 7.6 percent of his or her income on alcohol and tobacco products, compared to the EU average of 3.4 percent, according to a new study released this week. More of Czechs’ earnings also go on food and non-alcoholic drinks: 16.3 percent, compared to the EU average of 12.9 percent.