Business News

GDP exceeds expectations with 2.8 in Q1

The Czech economy grew in the first quarter of the year by 2.8%, or 0.3% more than preliminary estimates expected. According to the Czech Statistical Office which released the data, that means an increase of 0.9% compared to the last quarter of last year. The office says the increase was driven primarily by foreign trade and that the Czech economy was benefitting from healthy conditions in its main export market, Germany. Meanwhile, analysts for the Czech Press Agency say the news slightly improves the expected outlook for the growth of GDP for the whole year. Most anticipate around 2% growth for the year, which is still slower than the 2.2% in 2010. Foreign trade is expected to remain the driving force of economic growth; however the government’s austerity measures will work against any increase.

Exports up by 30% in 2010

Speaking of foreign trade, the Czech Top 100 association reports a good year for the fifty largest Czech exporters last year. 2010 saw a 30% increase in their exports compared to the previous crisis year, up to 832 billion crowns. The biggest exporter was, again, Škoda Auto, which increased its exports to 198 billion, followed by electronics manufacturer Foxconn CZ at 110 billion. RWE Transgas enjoyed a rise in exports of more than 50% year-on-year to 68.5 billion crowns. Czech Top 100 says the new list shows the greatest change year-on-year in the last five years, indicating promising recovery of Czech trade. In 2009 the fifty largest Czech exporters reported a 125 billion decrease.

Škoda Auto enjoys high sales in May

Škoda Fabia The good news does not end there for Škoda Auto, which recorded its highest May sales in history. The number of automobiles sold reached 78,100, or 19.5% more than the previous May, and marked new sales records for the company in Russia and Switzerland. Only 4,800 of those, however, were sold in the Czech Republic, where the most popular models were by far the Octavia a Fabia. The manufacturer moreover reported the sale of 373.400 vehicles in the first five months of this year, which is a year-on-year rise of 21.5%. The company says it is satisfied with the course of the year so-far and that it fully corresponds to their growth strategy.

Inflation sped up to 2.0 last month

Czech inflation sped up to 2.0% in May, compared to the 1.6% registered in the previous month. According to government figures released this week, a primary factor of rising consumer prices pushed inflation forward, with a year-on-year increase in the total consumer price index, minus rents, of more than 102%. The actual inflation growth was 0.3% higher than a previous estimate by the Czech National Bank. Nonetheless, analysts suggest that the rise will not mean the bank will have to increase interest rates anytime soon, as the inflation is driven by factors that such a step would not influence. Moreover, economists suggest that inflation will be reduced over the course of the year by high unemployment and low growth of wages.

Wizzair boosts Brno airport traffic with a new route to Eindhoven

The Hungarian low-cost airline Wizzair is set to start a connection between Brno and the Dutch city of Eindhoven on December 16, further increasing the passenger load at the Brno-Tuřany Airport. Already in the first quarter of 2011 the airport saw an increase in passengers of 63% more than in the same period last year, nearing 100,000 in only three months. The airport is now offering more foreign destinations than ever before, with connections to and from London, Milan and Moscow, and new flights to St. Petersburg, Rome and Alicante. Wizzair intends the new connection primarily for servicing Brussels and parts of Germany.