The Czech state budget in January ended in a surplus of 42.4 billion crowns, the highest surplus since 2000, the Finance Ministry said on Friday. Finance Minister Miroslav Kalousek said the figure did not take into account a hike in the VAT rates which came into effect on January 1, raising the dual VAT rates by one percent. The target deficit for the entire 2013 was set at 100 billion crowns; last year, the deficit reached 101 billion, or around 3 percent of the GDP.
The unemployment rate in the last quarter of 2012 reached 7.2 percent, which was 0.7 percent more than in the same period in the previous year, according to figures by the Czech Statistical Office released on Friday. The authorities registered some 380,000 jobless people in the last three months of 2012, which was 44,000 more year-on-year. The number of those unemployed for over a year rose as well, and they now account to over 42 percent of the total number of jobless people. Analysts say the fresh data confirm a negative trend of rising unemployment. Although companies are not laying off workers en masse, those who are made redundant are having trouble finding work.
In Business News this week: The Czech Ministry of Finance cuts its growth outlook for the year to almost zero; fresh figures show 7.2 percent of Czechs were jobless in Q4 2012; passenger numbers and flights were down at Prague airport last year; spas report a halving of business in just three months; and experts say luxury flats in Prague have maintained their value.
The Czech Finance Ministry has worsened its economic prognosis for the upcoming years in a new micro-economic analysis released on Thursday. According to the new estimates, the Czech GDP will grow only by 0.1%, compared to the 0.7% that was estimated in October. The Czech National Bank has previously placed the estimate at 0.2%. The Finance Ministry has dampened its prognosis because of the anticipated slowing down of growth in the Eurozone countries, which will influence Czech exports. The analysis predicts that the economic growth will pick up in 2014, when the economy should grow by 1.4%.
Just two days remain for individuals in the Czech Republic who bought property last year, or made substantial renovations such as adding a garage, to file their property tax. Other property owners do not have to meet the January deadline and can wait to receive notification from the tax office. The property tax was raised from three to four percent as of 2013 – part of the government’s measures to generate more revenue, complementing existing austerity measures.
In this week’s business news: The Czech Republic will have to build around 13 000 charging points for electric cars by 2020; The greatest number of foreign investors have decided to enter the Czech market last year since the beginning of the economic crisis; ČEZ’s distribution license in Albania has been revokes by the government there; Czech government debt is the eighth lowest in the whole of the EU; Budvar was unable to stop rival Anheuser-Busch from having the right to register the ‘Bud’ trademark in Europe.
The French company Areva that was excluded from a public tender for the expansion of the nuclear power plant Temelín has again received a negative response from the Office for the Protection of Competition to their request to suspend the tender. Areva was excluded last October by the state-owned energy company ČEZ from the tender competition because the company allegedly failed to meet the criteria. Areva has denied the claims and has twice requested for the tender to be suspended and re-evaluated. ČEZ is currently choosing between the Japanese-American Westinghouse and the Czecho-Russian Consortium MIR.1200.
An Albanian regulator on Monday voted to revoke the distribution license of a loss-making unit of the Czech energy giant CEZ. It is also holding the company liable for failing to import electricity into the Balkan state and not investing in its power grid. CEZ plans to contest the move and will demand compensation in a court of arbitration. The decision is the latest move in a long-running battle between CEZ and Tirana over power imports and prices.
The Czech power giant ČEZ has had its license to operate Albania’s national grid revoked just three years after entering the market. The state regulator’s decision, announced on Monday, follows months of controversy over tariffs and unpaid bills. ČEZ is now counting its losses, estimated at around 5 billion crowns, and is weighing an arbitration suit against the Albanian government. Economic journalist Chris Johnstone says the Albanian investment was a calculated risk that failed to pay off.
The Czech Republic was able to attract 48 companies to the country in 2012, which is the highest number since the financial crisis began in 2008, the financial daily Hospodářské noviny reported on Monday. Hospodářské noviny reported that the increase in the number and size of the investments is most likely due to the improvements in the tax code that came into effect mid-year, which allows for more tax benefits for companies.
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