In Business News this week: European Commission says Czech Republic needs no further austerity this year; Czech central bank cuts growth forecast for this and next year; Finance Ministry launches monitor of public finances; Škoda considers plans to produce utility vans; six Czechs are ranked among dollar billionaires; and groundbreaking travel firm Student Agency eyes Prague’s taxi market.
The Czech Republic should this year face no further budget cuts or tax hikes, as the deficit of the country’s public finances will not exceed 3 percent of its GDP, according to the latest forecast by the European Commission released on Friday. This is due to the Czech government’s austerity policy which has led to reduced public investment. However, the decrease in government investment, which has dropped by around 20 percent over the past four years, has had a negative effect on the Czech economy, which is going through a record long recession.
The Czech National Bank on Thursday cut its growth forecast for the faltering economy for both 2013 and 2014. This year, the central bank expects the economy to contract by 0.5 percent, down from its previous forecast of a 0.3 percent contraction. Next year, the bank predicts 1.8 percent growth, a revision of its previous estimate of 2.1 percent. Last year the Czech economy contracted by 1.2 percent. The Czech central bank also again decided to keep its key interest rate at the record low of 0.05 percent.
The Finance Ministry this week launched an online tool allowing people to follow Czech public finances, details of the state budget and economic information from all levels of the public administration. The website also provides structured information about the country’s budgets from previous years. The data come from more than 17,000 public organizations, such as government ministries, regions, municipalities and public universities. The tool, called Monitor, has been welcomed by anti-corruption campaigners as a major step toward transparent public finances.
Carmaker Škoda is considering plans to introduce a new line of utility vans, the weekly Ekonom reported this week. Škoda CEO Winfried Vahland told the publication that light utility vans were suitable for the brand but a final decision had not yet been made. In the past, Škoda made an all-purpose van for over 30 years but its production was stopped in 1999. Ekonom reports that Škoda’s line of vans should correspond to that of its mother company, Volkswagen, with only minor differences in the design and interior. That should facilitate production, which could start in late 2014. However, Škoda dealerships and service centres would first have to be adapted to fit the larger vehicles.
Six Czechs rank among dollar billionaires, according to this week’s Czech edition of the Forbes magazine. Those whose assets exceed one billion dollars, or over 19.5 billion crowns, include the owner of the PPF financial group, Petr Kellner, whose property is estimated at 208 billion crowns. Andrej Babiš, the owner of agriculture and food firm Agrofert, owns assets worth around 40 billion crowns, while the real estate magnate Radovan Vítek, on the list for the first time, has property worth 38.8 billion. Fourth on the list came Czech Coal owner Pavel Tykač, followed by Zdeněk Bakala and Karel Komárek. The list of 25 richest Czechs includes one woman: Jana Komárková, the owner of the railway wheel manufacturer Bonatrans.
The groundbreaking Czech transport company Student Agency has unveiled plans to enter Prague’s taxi market. Student Agency has paired up with an existing taxi firm, Tick Tack, and will launch its new service in July, the former’s CEO and owner Radim Jančura said on Monday. The firm, which pioneered private bus and railway transport in the country, plans to buy a fleet of upscale Audi and BMW cars and hopes to become the market leader within the next year.
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