In Business News: the 2013 state budget deficit may be substantially below target, business confidence in the Czech economy has increased, the Czech Central Bank governor has been voted Central Bank Governor of the Year for Emerging Europe 2013 and Canada’s decision to lift visas for Czechs is expected to renew airline connections and revitalize travel.
Czech PM sees 2013 deficit substantially below target
The Czech state budget deficit in 2013 may substantially undershoot the 100 billion crown ($5.27 billion) target thanks to an inflow of European Union subsidies, Prime Minister Jiří Rusnok said on Wednesday. The government budget, the main part of the overall public sector finances, showed a 38.2 billion crown deficit at the end of September. The full-year public sector plan called for a deficit of 2.9 percent of gross domestic product, and the latest Finance Ministry forecast from September saw a 2.8 percent gap.
Business confidence up
Business confidence in Czech economy increased from 91 points in April to 99 points in October but is still well below the global average of 113 points, according to the latest Regus Business Confidence Index (BCI) report published on Wednesday. In the next 12 months, Czech businesses will primarily be seeking cost effective services providers, the report said. They plan to improve business processes and gain maximum advantage from existing assets without compromising on expansion plans.
Czech Republic going strong in glass production
Glass and customs jewellery production remains a significant industry in the Czech Republic and its sales have grown by 160 percent since the 1990s, according to a study carried out by the Technical University in Liberec. The structure of the glass industry has nevertheless changed over the past 20 years, going from the traditional utility glass to decoration glass and lighting glass, but also glass fibres, glass packaging and flat glass. The Czech Republic has the highest per capita glass output in Europe. According to estimates, 130 kg of glass per capita were produced in the Czech Republic in 2010, compared with 81 kg in Germany, 74 kg in Italy and 71 kg in France.
Czech central bank governor voted governor of the year for emerging Europe
Czech National Bank governor Miroslav Singer was voted Central Bank Governor of the Year for Emerging Europe 2013 by the Emerging Markets magazine. According to Antonia Oprita, the Managing Director of Emerging Markets, the central bank governor received the award for "good communication policy" after the bank had exhausted the traditional means for easing monetary policy by interest rate cuts. According to her, the magazine appreciated that the Czech National Bank prevented the strengthening of the Czech crown by verbal intervention and by properly signalling to markets. Mr. Singer received the award at a special ceremony in Washington within the annual meeting of the World Bank Group and the International Monetary Fund.
National carrier to renew flights to Canada after visa restrictions lifted
Canada’s decision to lift visas for Czechs is expected to boost travel and renew airline connections between the two countries. Prague’ s Vaclav Havel Airport will resume flights to Toronto and Montreal in the spring of next year and Canada’s Air Transat will operate seasonal flights once a week from June to October. National air carrier ČSA halted flights from Prague to Canada in 2009, when Toronto re-imposed visa requirements for Czechs over an increased number of Czech asylum applications. The number of Czechs travelling to Canada dropped from 17,000 a year to around 10,000 after the restriction was put in place. The Czech association of travel agencies says it expects a rise in the number of package holidays and predicts that the number of Czechs travelling to Canada could double this year.
ČEZ to invest in cleaner technology
The Czech energy group ČEZ is going to invest 250 million crowns to cut nitrogen oxide emissions in the coal-fired power plant Pocerady, northern Bohemia, for which it has signed a contract with the Czech branch of the French concern Alstom, the server IHNED.cz reported this week. The reconstruction of two boilers at Pocerady will decrease emissions by 60 percent, the company said. ČEZ has also signed contracts on the modernisation of the Detmarovice plant, northern Moravia, and of the heating plant Trmice in north Bohemia. Both contracts went to Vitkovice Machinery Group. The investment is in line with Europe's Industrial Emissions Directive which aims to minimise pollution from various industrial activities throughout the European Union. The document will take effect in 2016 though some sources were granted an opt-out from the directive and can put off investments until 2020.
Tax uncertainty remains big problem for entrepreneurs
Tax uncertainty is perceived as a significant problem by over 70 percent of companies in the Czech Republic, which is more than in EMEA countries (Europe, the Middle East and Africa) where 60 percent of firms consider this a problem, a survey conducted by company Deloitte has shown. Companies complained less about the height of taxes that they did about constant changes to the tax system, which they said made long-term planning extremely difficult. According to experts greater stability, a simplification of the tax system and better cooperation with tax administration authorities would have a positive impact on the Czech Republic's trade relations and ability to compete.