Business round-up this week: Central bank could maintain weak crown policy longer; New record for Czech car industry with million output; Government signs contract with GE; Lower house moves to extend diesel tax rebate.
The Czech National Bank could under certain circumstances maintain its policy of keeping the crown weak until 2018, its governor Jiří Rusnok told the newspaper E15. Mr. Rusnok said, however, that the second quarter of next year was still the most likely date for ending the policy. It is, however, certain that it won’t be discontinued before then, he said. Since November 2013 the CNB has spent nearly 600 billion crowns on the currency markets keeping the crown at around 27 to the euro.
Car production in the Czech Republic was just over 1 million for the first nine months of this year, an increase of 7 percent on the same period in 2015. It is the first time that the million mark has been surpassed in the first three quarters of a year. The head of the Automotive Industry Association, Martin Jahn, told iHned.cz that the growth was due to increased domestic demand and greater interest in Czech cars in Western Europe. Škoda Auto accounted for more than half of the output, registering increased production of nearly 10 percent.
The Czech government has signed an investment contract with the US company General Electric for a plant to develop, test and produce turboprop aircraft engines. The centre is expected to create around 500 jobs. The Czech News Agency said the deal was worth at least 1.35 billion crowns, considerably less than the 9.5 billion crowns previously reported. Prime Minister Bohuslav Sobotka tweeted in connection with the contract that “cheap assembly was not the future” for the Czech Republic.
The lower house of Parliament has voted to extend a diesel tax rebate program to livestock farmers and other agricultural workers. Currently the program, under which farmers are able to claim 40 percent of the consumption tax they pay on diesel gas back from the state, applies only to grain farmers. Under the present amendment it should also apply to fisheries and forestry workers. The amendment, which still needs to win approval in the Senate, aims to raise the competitiveness of Czech farmers in the EU.
The number of state employees in this country has grown by around 23,000 since 2012, according to data released by the Ministry of Finance. Nearly 440,000 people are now employed by the state in the Czech Republic, which has a population of 10.5 million. Annual salaries for such workers have increased by 16.6 billion crowns in the last four years to reach 149 billion crowns. The average state employee receives 27,000 crowns a month.
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