Business News

Czech economy contracts less in Q1 than previously estimated

The Czech economy contracted by 0.7 percent of GDP year-on-year in the first quarter of 2012, according to adjusted figures released by the Czech Statistical Office on Friday. Compared with the previous quarter, the economy shrank by 0.8 percent. However, the latest data are more positive than previously announced estimates of a 1.0-percent decrease. Analysts said the contraction was caused by a sharp decrease in VAT intakes as well as in consumption tax revenues, particularly from tobacco products. The statisticians said many people bought their cigarettes and tobacco supplies at the end of last year, in anticipation of tax hikes.

Unemployment rate drops slightly to 8.2 percent in May

The unemployment rate decreased moderately to 8.2 percent in May, down from 8.4 percent in the previous month, the Ministry of Labour and Social Affairs said on Friday. Over 482,000 unemployed people were registered in May, which is more than 15,000 fewer than in April. The number of new jobs increased by 4.7 percent. The highest unemployment rates were registered in the districts of Most and Ústí nad Labem in northern Bohemia and Jeseník and Karviná in northern Moravia.

Lawmakers end the monopoly of Czech Post

The Czech lower house on Tuesday overturned a Senate veto and approved EU legislation that will end the monopoly of Czech Post for delivering letters and postcards. If signed into law by the president, the bill will end the state-owned postal company’s monopoly in 2017. Senators had rejected the bill over concerns it would lead to the closing down of post offices in small towns and villages. But the bill obliges Czech Post to continue all unprofitable operations for a five-year period after the liberalization and obliges all private postal services providers to pay into a fund that will cover the Czech Post’s losses.

Study: dropping education standards cost the economy 170 billion each year

A new study by the Prague-based CERGE-EI institute has determined how much decreasing Czech education standards cost the economy each year. The researchers studied what impact an improved performance by Czech pupils in the PISA tests would have on the economic growth, and discovered that should the standards return to the level of 2003, it would raise the Czech GDP by 169 billion crowns, or nearly 8.3 billion US dollars. In 1995, Czech pupils were among the best within all the OECD countries but education standards have been on a steady decline since then.

Coal war rages on between Czech billionaires

This week saw the latest instalment in a battle between Czech billionaires over who will control the lucrative coal and energy business in the country. The Czech Coal group, controlled by one of the richest Czechs, Pavel Tykač, ended a contract to supply brown coal to the Opatovice power plant, owned by two other big players on the market, the PPF group, which belongs to the multibillionaire Petr Kellner, and the J& T holding. Czech Coal said they ended the contract over the power plant’s failure to pay its 500 million crown debt; however, the plant’s management said Czech Coal was only pushing for an increase of coal prices. The Opatovice power plant was Czech Coal’s second largest customer after the state-owned energy giant ČEZ.

New glass factory opens in Světlá nad Sázavou

Photo: CTK A new glass producing plant opened this week in the old glass making town of Světlá nad Sázavou, in the Bohemian-Moravian Highlands, creating at least 25 new jobs. The firm Bohemia Machine said they invested dozens of millions of crowns into the new plant, which will process some 4 tonnes of glass a day. The new factory will produce utility glass products based on Czech designs. Some see the new factory as a fresh start for the traditional Czech glass making industry, which has been heavily hit by the economic crisis.