Business News

Latest growth numbers

First up, some numbers at a glance: the Czech economy continues the process of recovery with positive numbers across the board. The rough growth estimate released Friday suggests the economy grew 2.5% year-on-year in the first quarter of this year and a 0.6% rise compared to the previous period, twice the rate for the end of last year. The European Commission, however, has decreased its estimate for Czech economic growth in 2011 to only 2% from an anticipated 2.3. Unemployment then was reported this week to be down significantly, from 9.2% in March to 8.6% in April, amounting to about 34,000 fewer jobseekers.

Sazka sacks Ječmínek

Roman Ječmínek, photo: CTK The general meeting of bankrupt lottery company Sazka has dismissed deputy board chairman Roman Ječmínek, a consistent critic of general manager Aleš Hušák. The majority shareholder in the company, the Czech Sports Association, which convened the meeting, told the Czech Press Agency that Mr Ječmínek had damaged the good name of the company by filing for its bankruptcy on his own, and that this had reflected on the company’s economic results. They added that they feel his recent public statements, such as declaring a considerably higher company debt than imagined were of detriment. Mr Ječmínek says he expected the decision and will remain involved in the company as a shareholder’s representative. Sazka, the Czech Republic’s largest betting and lottery company, was declared bankrupt at the end of March.

Slim pickings for fruit farmers

The fickle weather of recent weeks has forecast bad times ahead for Czech fruit growers. They say freezing temperatures have caused damages in the hundreds of millions of crowns. That would make crop losses the largest in the last several decades and may be the last straw for some fruit companies facing tougher financial times. Fruit growers associations are looking to the Ministry of Agriculture for support. Some 6,400 hectares, or 37% of the orchards in the country are believed to be badly damaged, with only 39% having survived relatively unscathed. Worst off are cherries, three-fourths of which have been devastated. The annual fruit output of the Czech Republic is estimated at 1.5 billion crowns in an average year.

New civil code

At the beginning of the week the government presented a long-awaited final draft what should become the country’s new Civil Code, intended to unify private law covered in the Labour Code, the Commercial Code and other legislation. The effects of the new laws will be extremely far-reaching. For example, the transfer of real estate is more comprehensive, buildings and land are no longer two separate saleable items, travel agencies will have to compensate for holidays worsened by circumstantial problems such as lost luggage. Most importantly though the law redefines a myriad aspects of contract law and creates a “revolution” (say some media) in the insurance industry by instituting intangible damages for victims – something that is possible today but that insurance companies generally sue over. Primarily though, the limits on insurance benefits and the indemnity rates are set to change, which will likely mean increased liabilities for insurance companies and many a protracted lawsuit.

Fair trade enjoys boom

Fair trade is not just fair but fairly profitable in the Czech Republic, with the sale of such products rising by 60% year-on-year. Sales in 2010 topped 80 million crowns, about 30 million more than the previous year. Coffee is far and away the most popular fair trade product, pulling sales up year by year, with chocolates, jam and honey next in line. The boom in sales is largely due to the fact that chain stores have now started offering the goods as well.