In Business News this week: The Czech Ministry of Finance cuts its growth outlook for the year to almost zero; fresh figures show 7.2 percent of Czechs were jobless in Q4 2012; passenger numbers and flights were down at Prague airport last year; spas report a halving of business in just three months; and experts say luxury flats in Prague have maintained their value.
The Czech Ministry of Finance this week cut its growth outlook for 2013 to almost zero, with economic data showing that the country’s 18-month downturn has deepened. The ministry now expects growth of only 0.1 percent this year, down from an October forecast of 0.7 percent. Tax increases and budget cuts by the right-of-centre government led to a downturn in consumer spending, while a decline in demand from eurozone states led firms to make layoffs, cap salaries and reduce investment. Meanwhile, the ministry says inflation should reach 2.1 percent in 2013, down from 3.3 percent last year.
The latest Czech jobless figures show that 7.2 percent of the workforce were unemployed in the final quarter of 2012, a slight increase on the same period the year before. Over 40 percent of the 380,000 Czechs out of work in the October to January period were classified as long-term unemployed.
The state-run Vaclav Havel Airport Prague saw an 8.3 percent year-on-year fall in passenger numbers to 10.8 million last year, according to figures it released this week. The number of landings and takeoffs was down by 13 percent on 2011. The falloff in the airport’s business occurred against a background of problems for the national airline, ČSA, which the government has been trying to sell off.
Spa facilities in the Czech Republic have reported an extremely sharp decline in business, with patient numbers falling by around half in the last quarter of 2012. The Czech Spa Association blames the steep decline on new regulations under which health insurance firms no longer cover such treatment. Some spas have already scaled back services and let employees go.
Top-end flats in Prague have retained their value, the New York Times reported this week. A representative of one the city’s biggest real estate firms told the newspaper that properties in prime locations had kept their prices despite the economic downturn, adding that more Czechs and Russians were now buying luxury properties. However, rentals relative to purchase price have declined significantly since the mid 2000s, experts said, making apartments in the Czech capital a less attractive investment.
Czech retailers frequently deceive customers during sales and discount promotions, it seems; last year, over a third of the shops checked by the Czech Trade Inspection Authority were found to be in breach of regulations in that area, the news site novinky.cz reported. Fines totalling over CZK 5.5 million were levied.
The owner of one of the biggest players in Czech agriculture, food and chemicals, Agrofert, is set to step back from active involvement in running the business, the news site ihned.cz reported this week. Billionaire Andrej Babiš says he is now considering how the company will be run when he retreats from everyday management in the next year or two. In recent times, Mr. Babiš, who is 58, has established a political grouping pushing an anti-corruption agenda.