Business News

Czechs hit by rising fuel prices

Fuel prices at Czech gas pumps are reaching new highs, with a litre of Natural 95 – the most widely used gas – up by 20 hellers to 36.16 crowns in the space of one week. Diesel prices have also risen in the last week, up 14 hellers to 36.63 crowns per litre. Both fuels have risen in price by around one crown since January, according to a study by CCS, a Czech credit and debit card association. Rises in global crude prices are the main cause of the increases at Czech pumps, coupled with the effects of a strong dollar and weak crown. Since the beginning of the month, crude prices have risen by 12% - with geopolitical factors, including tensions over Iran playing a role – while some analysts predict Czech petrol prices could climb as high as 37 crowns per litre.

Crown hit by mysterious weakening

And a little more context on the state of the Czech crown, which on Wednesday mysteriously weakened significantly, losing 29 hellers and falling to 25.15 crowns to the euro. The crown also fell by 24 hellers against the dollar, standing at 19.01 crowns to the dollar. According to Patria Finance analyst Tomáš Vlk, there were no domestic reasons for the sudden fall, while a Reuters analyst noted that the money markets at the time were seeing investors making strong purchases of the euro in reaction to news of the Greek bailout deal. On Thursday, the crown bounced back somewhat against both the euro and dollar, rising to 25.12 crowns to the euro and 18.87 crowns to the dollar.

Forecast: Czech Republic and EU27 will both see zero growth in 2012

Photo: European Commission The European Commission has revised downwards it economic forecast for 2012. The eurozone is set to experience negative GDP growth of 0.3%, revised from an earlier estimate of 0.5% growth. Meanwhile, the estimate for the entire EU is down from 1.5% growth to zero growth in 2012. The Czech Republic, initially forecast last November to grow by 1.7% is also revised down to zero percent growth in 2012. Poland is expected to see the most growth, 2.5%, while Greece is expected to see the strongest recession, shrinking by 4.4% in 2012. Neighbouring Slovakia has had its growth revised down from 3.3% to 1.2%.

New Hamé chief promises end to deceptive practices

The new head of the Czech food giant Hamé, Martin Štrupl, has promised that the company will mend its ways after repeated acts of deception were unveiled by food inspectors. In the past, reports idnes, inspectors found that many of the company’s products had far lower levels of certain ingredients - for example meat in preserved food or tomatoes in ketchup – than it was declaring in its official ingredient lists. According to Martin Štrupl, who took over as head of the company in January, the company has now set up a strict ethical codex to make sure that standards are not allowed to fall again. Hamé produces 120,000 tonnes of food annually and the company insists that deceptive practices were only related to a small fraction of products in its budget range.

Fears that suspension of film rebate scheme may impact production

The Czech Ministry of Culture has suspended accepting applications for its film production incentive programme, saying it has run out of money. Under the scheme, designed to bolster domestic filmmaking and lure foreign productions, 20% of the costs of making movies and TV shows are refunded by the government. But the rebate scheme has reportedly found itself in the midst of a crisis, with only 300 million crowns left to reimburse 500 million crowns of already approved costs. One proposed solution is reducing the reimbursement rate from 20% to 14%, but this has raised concerns of an exodus of production from the country. 72 new applications from both domestic and foreign producers were lodged at the last minute before the deadline for the cessation of new applications expired in February, reports ČTK, but the crisis may still impact already approved productions in the country, such as the French TV series “Borgia” and the Brad Pitt movie “Gray Man.” The Ministry of Culture has said it is in talks with the Finance Ministry to seek a solution to the issue.