10-07-2003

Farmers to get more generous subsidies

The Czech government plans to top up direct subsidies its farmers will get from the European Union next year by four billion crowns ($142.9 million).

Preliminary 2004 Czech budget spending limits see 5.6 billion crowns in advance payments of direct subsidies. National governments first pay the subsidies and then reclaim them from the EU. The further four billion as the national top-up. That would put the overall subsidies at about 43 percent of what EU farmers get. Farmers in the ten EU candidate countries will get only a quarter of the amount of direct subsidies the EU pays to farmers in today's member states in the first year of membership. The Czech Republic is an industrialised country with less than 200,000 of its 10.2 million people working in agriculture. Experts say anything over 25 percent of direct payments should improve the economic condition of farm companies.

Year-on-year CPI grows for first time this year

The Czech yearly consumer price index ticked higher for the first time this year in June, but prices were flat month-on-month and the figures were below market expectations. The Czech Statistics Office said year-on-year inflation was 0.3 percent in June, after showing no change in May and deflation in the first four months of 2003.

Czech industry grows at slowest pace in nine months

Czech industrial output slowed beyond analysts' expectations in May to its weakest pace in nine months, due mainly to softening growth in manufacturing production. The Czech Statistics Office said overall industrial output grew by 3.2 percent year-on-year in May, the lowest gain since August 2002 when output actually contracted after massive floods hit the country. Output was up 5.6 percent in April.

Unemployment on the rise

The Czech unemployment rate increased to 9.5 percent in June, from 9.4 in May. The rise is mainly due to schol graduates hitting the labour market, but the main impact is expected in the months to come. Analysts expect the unemployment rate to exceed 10 percent by the end of the year.

GDP calculation methodology to be revised

The Czech Statistics Office said that a change in methodology for calculating economic data is likely to raise gross domestic product significantly and will force a revision to historical data as well. The change is due to harmonisation of national accounts of EU candidates with those of the Union. It will raise GDP per capita by about five percentage points from the current 60 percent of the EU average and bring the Czechs closer to meeting criteria for joining the euro.

Govt approves new bookkeeping regulations

The government approved new regulations for bookkeeping. Double-entry bookkeeping will newly be compulsory for companies with more than three million crowns in annual revenue, and firms with publicly tradable shares will be required to adopt international accounting standards as of 2005.

Radiokomunikace to sell off Contactel

Czech telecoms company Ceske Radiokomunikace said that Danish operator TDC would pay a single crown ($0.035) to buy its minority stake in Czech Contactel to become sole owner. TDC will buy the 40.4 percent stake it does not already own in the money-losing Contactel, subject to antitrust approval and Contactel shareholder approval. Ceske Radiokomunikace, controlled by a special purpose vehicle set up by TDC and its financial partner Deutsche Bank, said in a statement its stake in Contactel had earlier been valued at zero by a court-appointed auditor. Contactel, which provides data, Internet and fixed-line voice services and competes with former Czech monopoly Cesky Telecom, posted a loss of 693 million crowns on revenue of 750 million crowns last year.

10-07-2003