In Business News this week: the Czech public debt reaches a new high; Czechs buy less food, clothes and home appliances; Albania is set to withdraw ČEZ’s licence to operate in the country; up to 40 percent of retailers violate trade regulations during post-Christmas sales; and the popular Czech butter spread will undergo an EU-enforced name change by mid 2013.
Economically speaking, the year 2012 was a difficult one for the Czechs. The country’s economy, heavily dependent on exports to the eurozone, is according to most estimates set for a contraction of around one percent. Wavering demand from the euro area along with weak and fading domestic spending are considered the main reasons behind the decline, not helped by the government’s austerity and tax hikes. In 2013, the eurozone is generally expected to return to moderate growth – but will this be enough to revive the Czech economy as well? That’s a
Liquor sales are reported to have dropped by 10 percent in the wake of the methanol poisonings. According to the head of the Union of Spirits Producers Petr Pavlik, 2012 was the worst year for Czech spirits producers since 1990. Czechs are not only consuming less spirits in pubs and restaurants, they are also shunning home liquor brands in favour of costlier imported labels and drinking more wine and beer. Vodka sales in particular are significantly lower.
In the past weeks in the Czech business world: Almost 3700 businesses had to close in 2012; the state deficit for the last year was lower than the government had expected by 4 billion crowns; online stores had big profits in December thanks to Christmas shopping; the crown may will most likely take a hit in 2013; the Czech Telecommunication Office wants to help more mobile phone operators enter the local market.
The number of both corporate and personal bankruptcies declared in 2012 rose by 46 percent compared to the previous year, according to figures by the company CCB. Nearly 3,700 firms went bankrupt last year; most of them were self-employed people registered as entrepreneurs. Some 60 percent of bankrupt firms were active in the services, trade and restaurant sectors. Meanwhile, nearly 17,000 personal bankruptcies were declared in 2012 which was the highest number since their introduction into Czech law in 2008.
Interest in precious metals and stones in the Czech Republic, is reaching new highs, either for personal use, in the form of jewellery, but in the form of bullion as an investment. Czechs this year alone, for example, spent more than three billion crowns on gold bars, even though the price of the precious metal has almost doubled over the last two years.
Shopping is the main reason for the inhabitants of the west Bohemian and German border areas for the crossing the frontier between the two countries, according to a new study by West Bohemian University in Plzeň. The survey found that every other German visitor to the Czech Republic and more than two thirds of Czech visitors to Saxony came to shop. Czechs buy mostly groceries, cleaning products, cosmetics, clothes and shoes in Germany while Germans mainly come to buy fuel and tobacco products. On their shopping trips, Both Czechs and Germans spend between 50 and 100 euros on average.
With Christmas just around the corner the hustle and bustle in Prague’s streets and shops has visibly intensified. Yet behind the bright lights, the ever-present advertisements and Christmas carols the mood is slightly more sober this Christmas, reflecting the deepening recession and bleak outlooks on the job market. Czechs are enjoying the Christmas atmosphere but they are spending less on presents and are far less willing to take out loans for exotic Christmas holidays or buy things on lease as they have been doing for years.
The police in Most, in the north of the country, closed an online store selling neo-Nazi music, clothes, and other artefacts. The police said that two brothers, aged 30 and 33, set up the store in 2009. Some 2,000 items were confiscated during a search of their house, 70 percent of which were considered as illegal under the Czech law. If convicted, the men could receive 10-year prison sentences.
More Czech companies will lay off employees in the first quarter of 2013 than those planning to take on new staff according to a Manpower Labour Market Index poll conducted among 750 Czech firms. Only 3 percent of employers said they were hiring staff while 11 percent are planning lay-offs. 85 percent of respondents said they were not planning on significant changes in staff numbers. The report is the most pessimistic outlook in four years, a fact widely attributed to a fall in turnover due to dropping demand.
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