Six percent of the firms operating in the Czech Republic are planning redundancies in the next three months, suggests the Manpower Labour Market Index, which came out on Tuesday. The last such index released in September found that only one percent of firms in this country were planning job cuts. The situation is worst in Moravia, suggests the study. The index, however, does indicate that the situation overall in the Czech Republic is more favourable than elsewhere in Europe, such as in Ireland, Spain and Italy, where larger-scale redundancies are predicted.
Ever since the onset of the global economic crisis, the Czech Republic has been spared some of the stronger side-effects of the financial slowdown, particularly when compared to its western neighbours. However, a new set of economic data suggests that the country’s period of economic upswing is over. Although talk of an actual recession is still rare, the forecast, with job losses, a growing trade deficit and decreased consumer demand, is becoming increasingly gloomy.
In Business News this week: Czechs are spending much less on their Christmas shopping this year than last; the US has put the Czech Republic on a pirate-goods blacklist; unions claim that Škoda Auto is to cut back operations by three percent, and Czech sport is feeling the effects of the global financial crisis.
Direct foreign investment in the Czech Republic rose in 2007 by 50 percent to 185.3 billion crowns (9.2 billion USD), the Czech Statistical Office said on Tuesday. According to the office, foreign investment accounts for a much higher than average share of GDP in the Czech Republic. Around 55 percent of this country’s gross domestic product is made up of foreign investment, as opposed to 31 percent in Poland and 20 percent in Slovenia. Of the EU’s newer member states, Estonia tops the list of those most dependent upon foreign investment, with 77 percent of all GDP generated by outside investment.
One of the largest meat-processing factories in the Czech Republic, Masokombinát Klatovy, west of Prague, has announced both a cut in production as well as a round of layoffs. According to news sources, 180 of 208 of the company’s worker’s are to be made redundant. Analysts say that the layoffs are unrelated to the global economic slowdown, but rather reflect the long-term financial woes and deep debts of the company, which has existed since before the Velvet Revolution.
In this week's Business News: Is the Czech Republic bucking the trend of the global economic slowdown? The Czech electricity company ČEZ has seen profits go up by forty percent compared to last year; employees of the troubled Karlovarský Porcelán porcelain maker are to go without pay for the month of October; the Prague bourse responded to an upward turn for world markets on Thursday by showing strong gains in early trading of Friday and Czech companies have set aside around 750 million crowns during 2008 for charitable spending.
In this week's Business News: the Czech Central Bank slashes interest rates by three-quarters of a percentage point, while downscaling its GDP growth forecast again; the majority French-owned Czech bank Komerční Banka has posted profits of 9.94 billion crowns for the first nine months of 2008; a new survey suggests that Czechs are likely to spend significantly less during the Christmas period than last year; the Czech government is seeking to write-off the majority of a nearly one billion crown debt owed by Russia since the Soviet era and Czechs
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