The Finance Ministry, in a new macroeconomic forecast, has revised the country’s economic outlook downward, expecting stagnation in 2013 and 1.2 percent growth in 2014. By comparison, in January the ministry predicted 0.1 percent expansion for this year and rise of 1.4 percent for the next. The outlook may further worsen, said the ministry´s spokesman Ondřej Jakob. Factors include developments in the euro zone as a majority of Czech products are exported to euro zone countries. The Finance Ministry expects the euro zone economy to contract by 0.3 percent this year. The moderate worsening of the estimated economic development this year reflects unfavourable data from the first quarter, analysts confirmed.
In the Business News this week: Korean Air completes deal for 44-percent stake in CŠA; jobless rate falls for first time in nine months, but only slightly; labour costs in Czech Republic are below half EU average; car production slows; mobile operators are offering new low monthly prices for unlimited calls; and forest owners want state compensation for recreational use of land.
Czech municipalities have been given greater powers in regulating gambling on their premises. On Thursday the country’s Constitutional Court struck down legislation that prevented town and city halls from banning lottery video terminals on their premises until the end of 2014. The judges said that the provision, which protected terminals licensed by the Finance Ministry, contradicted communities’ right to self-administration. Jan Richter spoke to Vladan Brož from the anti-corruption watchdog Transparency International about the court’s ruling.
The government could save up to 870 million crowns annually on the maintenance and rent at state bureaux and institutions, the prime minister said on Thursday, if spending limits – relative to performance – are introduced. Taken into consideration would be factors such as office size, budget expenses for IT, as well as telephone costs. The recommendation for spending ceilings to be introduced based on KPI (key performance indicator) was put forward by the government’s economic advisory council NERV.
The Czech government on Wednesday approved legislation reforming the financing of political parties. The bill will require parties to establish transparent bank accounts accessible on the web; they will also have to release their annual accounts and details of campaign finances. However, the bill does not establish an independent body that would monitor parties’ finances; its absence has been criticized by the Council of Europe’s anti-corruption agency. The new legislation will now be debated by the Czech Parliament.
Unemployed people who start businesses that operate for at least two years could receive a handout of up to CZK 80,000 from the state, while firms could get support for employing parents part-time or the under 30s, as part of a wide-ranging government plan to fight unemployment discussed by the government, unions and employers on Tuesday. A commission comprised of representatives of the three groups – known as the tripartite – are to work on developing the plan, which will be discussed again on April 25.
The unemployment rate in the Czech Republic fell from 8.1 percent in February to 8 percent last month, according to figures released on Tuesday. Some 573,875 people were out of work in the country in March. Analysts said the slight improvement was down to seasonal factors and pointed out that the Czech labour market was still beset by negative trends linked to the overall economic development. The jobless rate in Prague last month was 4.6 percent, the same as in February.
The minister of labour and social affairs, Ludmila Müllerová, says her ministry will this year lack billions of crowns needed for social welfare payments. Speaking on a TV debate show on Sunday, she said she would ask the Ministry of Finance for increased funding. However, the minister of finance, Miroslav Kalousek (who is also from the TOP 09 party), said he could find no extra money for the Ministry of Labour and Social Affairs. Mr. Kalousek said Ms. Müllerová would have to find the money needed within her own department, which receives the greatest amount for outlays of any ministry.
The Romanian government has decided to limit support for existing renewable energy providers and to halt funding for any new projects. This decision will affect the Czech company ČEZ which owns a wind farm in the country. The energy giant has lost its energy distribution license in Albania in January, and its operations in Bulgaria have been under investigation for the past two months.
The Czech Post is launching a new online service that would provide exact daily gas prices at petrol stations around the country. The postal service created the project with the Industry and Trade Ministry according to the Hospodářské noviny daily, and will rely on the information that letter carriers will gather on their daily routes.
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