The Czech Finance Ministry will temporarily ease austerity measures; instead, it will use government spending to stimulate economic growth, the news agency ČTK reported on Friday quoting the ministry’s fiscal outlook. The ministry expects this year’s deficit of Czech public finances to drop to 2.8 percent of GDP from 4.4 percent in 2012; in the following years, the deficit should remain at similar levels. The ministry therefore believes it will be able to use government spending to stimulate economic growth. According to the latest predictions, the Czech economy should stagnate this year, and grown by around 1.2 percent of GDP in 2014.
In this week's Business news: Central bank governor says the Czech Republic won't adopt the Euro before 2019; The OECD lowers the forecasted growth for the Czech GDP to -1.0 percent; The automomotive industry increased revenues by 7 percent last year; Google releases Business Photos in the Czech Republic; Bosch plans to hire 100 more engineers for its South Bohemian innovation center.
The Constitutional Court has completed the first day of hearings concerning the proposal to repeal the law on church property restitution. The proposal was submitted by 18 senators from the Social Democratic, Communist and Public Affairs parties, who claim the law, which came into effect earlier this year, goes against the separation of church and state. The group suggested a number of witnesses to be heard by the court on Wednesday, but the panel of judges rejected them. According to the disputed legislation, the government will pay out approximately 134 billion crowns in property and financial compensation to religious institutions, as restitution for property taken away from them by the state. After hearing the evidence and final arguments, the Constitutional Court suspended proceedings on Wednesday afternoon until next Monday.
In Business News: the IMF has advised the Czech government against making further budget cuts in view of the country’s worse-than-expected economic development; Finance Minister Miroslav Kalousek has questioned the financial wisdom of expanding the Temelín nuclear power plant; Czech arms producer Česká zbrojovka has won a multi-million crown tender to supply 50,000 pistols to the Egyptian interior ministry and the Czech liqueur maker Rudolf Jelínek posted its first loss since 1998.
The Ombudsman has said he will look into complaints regarding how banks and insurance companies are treating older clients. Apparently some financial institutions are refusing to issue older people credit cards and asking them to pay higher health insurance on trips abroad purely on the grounds of age. The Ombudsman’s Office is planning a survey of 45 banks and 52 insurance companies to get an overview of the situation. The results should be known in August.
A public tender for the renovation of the National Museum’s historic main building on Wenceslas Square was launched on Monday. The tender was approved in April by the government and subsequently by the finance and culture ministries. Proposals received will be revealed at the end of August. The main building of the National Museum will retain its historic facade which was designed by architect Josef Schulz, but visitors in the future will be able to enjoy a modern exhibition venue following 21st century trends, representatives have made clear. One of the most prominent elements in the renovation plans is the creation of a tunnel connecting the National Museum’s main building with a sister-site which used to serve as the Parliamentary building in the former Czechoslovakia.
The police have charged 25 people with tax fraud relating to imported goods from Asia. Among those charged are five customs officers and several Vietnamese nationals. The damages could reach millions of crowns. Individual members of the group have also been charged with organized crime and taking or soliciting bribes.
Czech annual inflation remains unchanged at 1.7 percent, which is in line with market expectations and slightly below the forecast of the Czech National Bank (1.8 percent). Consumer prices rose by 0.1 on the month in April, driven by the higher prices of clothing, footwear, alcohol and tobacco products. On the other hand, the price of foodstuffs, primarily pastry and dairy products, decreased slightly. Separate data released by the Czech Labour Ministry on Friday showed the April jobless rate at 7.7 percent down from 8.0 percent.
In this week’s Business News: The grey economy in the Czech Republic is estimated to be 16% of the GDP; Average fuel prices have gone done for the fifth week in a row; The Czech energy company Enrgo-Pro has been fined by the Bulgarian anti-monopoly agency; Unemployment sees a small decline to 7.7% in April, due to more seasonal positions; A group of international solar energy investors have filed an arbitration suit against the Czech Republic; Czech and Poles want to oppose planned EU legislation curbing cigarette sales.
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