In Business News this week: the Central Bank says it may cut interest rates further, the Czech Republic’s fourth biggest beer producer Budějovický Budvar is bringing out an 11 percent brew and hobby markets in the Czech Republic are doing good business despite the crisis.
The Czech central bank may cut interest rates further if the economic situation warrants such a move, central bank Vice-Governor Miroslav Singer said on Thursday. Czech borrowing costs are at a record low after a cut earlier this month and three of the seven Czech policymakers have said since then that a further rate reduction was a possibility. The once fast-growing Czech economy slumped in the first quarter, with gross domestic product shrinking by a record 3.4 percent year-on-year, as exports plunged. The central bank cut rates by a quarter point on May 7, bringing the two-week repo rate used to drain excess liquidity to a record low of 1.5 percent.
New finance minister Eduard Janota is burnishing his reputation as the protector of the state coffers. At the start of the week he forced through his demand that the public deficit does not exceed 700 billion crowns in each of the next three years. However this will still be too high for the Czech Republic to adopt the single currency euro. At the end of the week Mr Janota was warning that he would not sign off an ambitious information technology project to create a single state coffer by linking up around 700 offices and institutions dealing with the country’s cash flow. The problem is that the project threatens to overrun its original 2.4 billion crown budget with the extra costs needed for it to be running by the start of next year still unclear.
The Czech Republic’s fourth biggest beer producer Budějovický Budvar this week joined the rush of local brewers to bring out an 11 percent beer. State-owned Budvar is the last of the four big brewers to seek some salvation in the stronger than normal lager. The new arrival goes by the name of Pardál Echt. Czech brewers have had a tough start to the year with local sales falling 8.0 percent and exports down 12 percent compared with the same period a year earlier. Sales have picked up a bit with the hot weather since April.
Bollywood has found Bohemia is the title of what could be a promising love story. The booming Indian film industry is, according to local newspapers, keen to use Czech film studios and know-how for more of its productions. This could take up some of the slack left by the cash starved US studios. One Czech production company, Punk Film, says it is working on two Bollywood projects and a series of smaller projects are also in the pipeline. Local media point out however that the take away Indian film industry can not really be compared to its US counterpart in terms of local spending with the Indians bringing many of their own extras and even catering.
Czechs have always been into DIY jobs and hobby markets such as Hornbach, Baumax and OBI are gaining increasing popularity. Sales figures show that Czechs spent a record 29.8 billion crowns in the five largest hobby-market chains last year, up 4.5 billion year-on-year and the fastest growth in the last few years. Some experts say that hobby markets can now benefit from the economic crisis, as Czechs postpone the purchase of new things and repair old ones. Hornbach, for example, intends to build four more outlets on the domestic market by the year 2015. Data from the firm Home Credit, which provides consumer loans, show that people now buy more tools, gardening equipment and building materials. The amount of money Home Credit lent in the first quarter in this area jumped by 272 percent year-on-year.
Over 1,000 skeletons discovered during renovation of Kutná Hora “bone church”
Language exams for foreigners seeking permanent residency permit to become tougher
Why are Russian and Chinese spying activities in Czech Republic so intense and how exactly do they do it?
Prague’s historical Koh-i-noor factory to be converted into residential area
Gunman kills six patients in Ostrava hospital, two more fighting for their lives