Business News

Government debt reaches almost 40 percent of GDP

The Czech Republic's government debt reached 39.8% of the gross domestic product in the third quarter of 2011 and was the seventh lowest in the 27-member European Union, according to data released this week by Europe's statistical office, Eurostat. The debt-to-GDP ratio in the EU in the third quarter rose in a quarter-on-quarter comparison from 81.7% to 82.2%. Conversely, in the euro zone the ratio fell from 87.7 percent to 87.4 percent. The data shows that only 13 of the 27 EU member states meet the "debt criterion" of no more than 60% of GDP. This criterion is one of the conditions for adopting the euro. In a year-on-year comparison, the EU's debt rose to 82.2% of GDP in the third quarter of last year from 78.5%. The euro zone's debt grew to 87.4% in Q3 2011 from 83.2% in the same period of 2010, Eurostat reported.

Unemployment jumps to more than 9 percent

January saw a sharp jump in the number of unemployed in the Czech Republic: five-tenths of a percent since December of last year to an overall 9.1. The statistics were released by the Labour and Social Affairs Ministry this week. Analysts attributed the rise in the unemployment figure to many jobs being seasonal, but the expected economic downturn has likely also played a role; otherwise, a worsening in the unemployment figure was expected for January. Together with the rise in unemployment, firms are currently offering 1,300 fewer jobs than in December.

Czech state loses up to Kc30bn a year due to tax evasion

The Czech state loses an estimated 25 to 30 billion crowns every a year on account of tax evasion, according to the Finance Ministry’s General Financial Directorate. The largest part of the sum consists of fraud related to value added tax, which accounts for 10 to 15 billion, and five to eight billion regarding evasion of VAT on fuel alone. A new trend in cases of fraud related to timber imports has also been noted. The head of the directorate, Jan Knížek, notes that the actual figure of total tax evasion is difficult to estimate, adding that some taxpayers may verge on unlawful behaviour that cannot be strictly classified as tax evasion.

Unions reject Škoda Auto offer

Car manufacturer Škoda Auto has offered employees at its Mladá Boleslav plant a 2.5 percent salary increase following collective bargaining with the workers’ unions. But the offer, made in a first meeting being described as a “fiasco”, was rejected outright by the unions, which expect inflation of more than three percent, meaning the bump represents a decrease in terms of real wages. Škoda Auto has declined to comment on the negotiations. Talks on a wage increase began last week with three union organisations in Mladá Boleslav, Kvasiny and Vrchlabí. Škoda Auto employs almost 26,000 people; the average salary at the firm is 34,500 crowns per month.

Sales of dog winter wear quadruple

Photo: Philip MacKenzie, stock.XCHNG The sale of winter clothing and apparel has reportedly seen a big jump following the continuing cold snap and current arctic conditions in parts of the Czech Republic. Not only has the sale in clothing seen a bump by consumers but also dog’s winter wear and apparel. According to sources the sale of winter sweaters and other clothes for doggies, for example, has quadrupled. Specialised stores reported atypically high consumer interest last week, with at least one confirming by Friday’s end that only few items remained in stock.