The Czech central bank on Friday released an improved estimate of the state budget deficit. It now predicts the deficit will reach 2.3 percent of the country’s GDP, down from its previous estimate of 2.4 percent. The Finance Ministry expects this year’s deficit to reach 2.8 percent. Next year, the Czech National Bank forecasts a further decrease of the deficit to 2.0 percent of GDP.
This week in Business News: Consumer prices dropped in June, along with inflation rate; Study shows that many key sectors still have very few women in management; Construction and industrial output down in June; New tougher regulations on alcohol distribution go through lower house; Businesses would mostly welcome early elections in hopes of a more stable political and economic situation.
The lower house on Thursday passed legislation put forward by the Senate effectively nixing the controversial S-Card system which was to have streamlined the payment of social benefits for recipients. The system is expected to come to an end later this year; pensioners, welfare recipients or others will receive payments to their account or be able to cash in cheques at their local post office as was the case before. The legislation will now head to the upper house.
The hotly-anticipated trial of MP and former governor of Central Bohemia David Rath has begun at Prague’s Regional Court. Mr. Rath, who has been in custody for more than a year, faces charges of bribe-taking and manipulating public tenders. Outside the court, the one-time prominent Social Democrat handed out copies of a written statement saying he was innocent and would fight to the last. Mr. Rath and 10 other defendants, one of whom is a former MP, could face up to 12 years in jail if found guilty of the alleged corruption.
In one of its major decisions since assuming office in July, the Czech government has decided to end support for most renewable sources of energy. The draft legislation, triggered by relatively high electricity prices, would scrap state support for new solar and biogas plants as of 2014. It would also cap the subsidies paid by consumers in support of renewable energy sources.
In its annual report on the Czech Republic Social Watch criticizes what it calls the excessive austerity measures introduced by the former centre-right cabinet which it says led to job uncertainty and a deteriorating standard of living for the majority of Czechs. Social Watch says that people’s growing frustration with the situation has led to political apathy and has fuelled anti-Roma sentiments. The report also criticizes the lack of women in politics and rampant corruption.
The Regional Development Ministry is planning to seek damages of 56 million crowns n the highly anticipated corruption trial of former Central Bohemian governor David Rath, which begins on Wednesday. The amount is equivalent to the funds paid out by ministry for projects in the Central Bohemia region, which were covered by grants from the European Union, Czech Radio reported on Tuesday. After last year’s arrest of Mr. Rath and a number of his associates who were accused of manipulating EU-funded projects, the European Commission refused to reimburse the Czech Republic.
The Czech Republic will buy 100,000 tonnes of oil for its emergency reserves by mid-2014 the internet news site ihned.cz reported on Tuesday. The Administration of State Material Reserves will declare an open tender for deliveries worth around 1.6 billion crowns. Only reliable suppliers with at least a three-year history in the business and three or more similar orders implemented in the past will be considered. Price will be the main criterion.
The International Monetary Fund on Friday cut its forecast for the performance of the Czech economy in 2013 to an 0.4 percent contraction, from a previous estimate of 0.3 percent growth. The IMF said despite its healthy fundaments, the Czech economy was in the middle of a long recession caused by the Eurozone crisis and weakened domestic demand. The worsened outlook corresponds to the latest estimate by the Czech central bank which predicts a 1.5 percent contraction this year. For 2014, the IMF forecasts a growth of 1.5 percent.
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