Business briefs

16-12-2004

2005 budget approved at deficit of over 80bn crowns; Current account deficit up in October; Electricity and gas markets set to liberalise; Orco Property group to list shares on Prague bourse; Subsistence level allocation raised; cuts in welfare still planned

2005 budget approved at deficit of over 80bn crowns

The 2005 federal budget was approved this week. All 101 coalition MPs were present for Wednesday's vote, ensuring it was passed by the 200-seat lower house. The budget envisages a deficit of over 80 billion Czech crowns (2.7 trillion euros). It now has to be signed by the president. The main opposition Civic Democrats criticized the budget, saying it would not foster growth and meant the country was living in ever more debt.

Current account deficit up in October

Meanwhile, the Czech Republic's current account deficit rose to $561 million in October, official figures showed this week. The figures were slightly better than expected. The euro zone is by far the Czech Republic's biggest trading partner and a strong crown has hurt the balance of payments by making Czech exports more expensive and foreign imports cheaper. The tourism-driven service sector continues to post surpluses.

Electricity and gas markets set to liberalise

The Lower House of Parliament has passed an amendment to the energy law under which the Czech electricity and gas markets should be liberalised by 2007. As of next year large companies should be able to choose their supplier of natural gas.

Orco Property group to list shares on Prague bourse

The Orco Property group -- a leading investor and developer in the Central European real estate market -- is planning a dual listing of its shares and convertible bonds on the Prague Stock Exchange early next year. Market analysts hope the placement will give new life to the sleepy Prague bourse, which had not had a single initial public offering until this summer, when the Zentiva pharmaceuticals company made a 280 million dollar placement.

Subsistence level allocation raised; cuts in welfare still planned

The Minister for Labour and Social Affairs has said that the government will raise the subsistence level slightly as of next year, to 4300 crowns, the equivalent of about 180 dollars per month. However, in future the Ministry still intends to cut the subsistence level payment and introduce a new welfare system that encourages people to be more active in looking for work.

16-12-2004