Finance Ministry raises growth outlook for this year and the next; ECM Real Estate declared bankrupt; Central European banking has stabilised; Forbes magazine is coming to the Czech Republic; Zuno Bank opens its virtual doors to Czech customers.

Finance Ministry raises growth outlook for this year and the next

The Czech Finance Ministry has improved the country’s economic growth outlook for this year and the next by 2.5%. Previously the ministry estimated growth of 1.9% this year and 2.3 in 2012. The new macroeconomic forecast published by the Czech Press Agency expects much better results arising from auspicious developments in the first quarter of 2011. The forecast again puts the positive estimates down to foreign trade primarily. Industry and transport unions are sceptical however, and say the ministry’s outlook does not take sufficient account of the deceleration of the US and Japanese economies and seems to rely on favourable numbers in the German economy. The Czech National Bank lowered its own prognosis in May, expecting GDP growth of 1.5% this year and 2.8 in the next. Its new prognosis will be published on August 8.

ECM Real Estate declared bankrupt

ECM Real Estate Investments went officially bankrupt this week after a meeting of creditors on Wednesday. The company, known in the Czech Republic mainly for its high-rise projects in Prague’s Pankrác district, has 15 days to appeal and is reportedly considering that option. Creditors are claiming 9.5 billion from the firm, of which the bankruptcy trustee has recognised nearly two billion. Investment managers Astin Capital Management are claiming 3.1 billion crowns on behalf of bond owners, however neither the meeting of creditors nor the court has recognised that claim due to material and legal disputes. The trustee may now decide whether or not to continue in the company’s activities or prepare for property liquidation, which could mean the sale of the company as a whole or in part.

Central European banking has stabilised, says ratings agency

Fitch Ratings agency reports that the banking situation in Central and Eastern Europe has gradually stabilised since the global financial crisis in terms of credit parameters, with the share of bad loans on most of the markets having peaked already. In its special report on the banking sector in Central Europe and the Balkans, Fitch says the credit profiles of the majority of Czech, Polish and Slovak banks are considerably stronger than elsewhere, with better financing profiles, less foreign exchange credit, better quality of assets and a higher level of economic development in general. The report goes on to note that considerable structural problems remain, particularly with regards to the reliance on financing from foreign parent banks and an excessive amount of loans in foreign currencies in many markets.

Forbes magazine is coming to the Czech Republic

Forbes magazine is coming to the Czech Republic, with its first Czech language issue to go to press in November. In cooperation with the Czech branch of Business Consulting & Media, Forbes Media is planning each issue to have 60% localised material from Czech economics and business news and 40% borrowed from the American edition. The monthly’s editorial board will be run by Petr Šimůnek, former editor-in-chief of the business daily Hospodářské noviny, who says the new publication will provide what the Czech market lacks, which is emphasis on proper, fundamental analysis. The publishers hope to repeat the success they have enjoyed in Slovakia, where Forbes came out at the end of 2010 and sold nearly 11,000 copies in April alone.

Zuno Bank opens its virtual doors to Czech customers

Another Slovak start-up moving westwards is Zuno Bank, which opened its virtual doors this week to customers in the Czech Republic. The online bank with only one real-world office at Prague’s Wenceslas Square is enticing new clients with the offer of free basic accounts, daily interest on savings and higher interest on time deposits. A part of Raiffeisen Bank International, Zuno has acquired some 18,000 clients since starting business in Slovakia at the end of last year and deposits of more than three billion crowns. The bank says its target group is people who want to communicate with the bank primarily via the internet. Next year it is planning on extending its activities to Hungary and Poland.