The Czech unemployment rate in September remained at 7.6 percent, unchanged from the previous month, according to government figures released on Friday. The country’s labour offices registered over 550,000 job seekers last month, which was 377 less than in September. Compared to the same month last year, however, there were nearly 60,000 unemployed people more. Analysts say the Czech labour market has stabilized but expect a slight increase in the number of jobless people in the coming months.
In Business News: the Czech National Bank has moved to weaken the crown, interest rates have been left unchanged at an all-time low, the PPF investment group has signed a deal to buy a majority stake in Telefonica Czech Republic and the clothing retail chain C&A is curbing its expansion plans after seeing a drop in profits.
The Czech National Bank launched the first monetary intervention since 2002 on Thursday afternoon. The bank’s council announced that it is aiming to lower the value of the crown to around 27 for one euro. Immediately after the announcement, the crown dropped from 25.8 to the euro to 26.63. Although there have been speculation about possible intervention for the last few months, many analysts have been surprised by the move, given that it did not seem necessary at this point, given the recent trade balance figures. The national bank’s council also voted not to change the interest rate.
The PPF investment group has signed a deal to buy a majority stake in Telefonica Czech Republic. In a statement, PPF said it was spending almost CZK 64 billion to acquire 66 percent of the shares in the country’s biggest telecommunications company. The contract still has to be considered by the Czech anti-trust authority. The acquisition includes Telefonica Czech Republic’s daughter company Telefonica Slovakia. PPF is controlled by Petr Kellner, the Czech Republic’s richest man.
The Czech state budget deficit grew to 47.7 billion crowns in October from September´s 38.2 billion, according to a Finance Ministry report released on Friday. It is the best result for October since 2008. The state budget deficit for 2013 has been projected at 100 billion crowns but Prime Minister Jiří Rusnok said last month that thanks to money from EU funds, the budget gap this year could be much lower than projected.
Experts cited by the CTK news agency agree that a coalition between the Social Democrats, Christian Democrats and ANO would not bring about significant economic changes. They consider such a coalition as the only viable option and note that the direct or indirect participation of ANO in government would effectively prevent the Social Democrats from raising taxes. The three parties would also most likely commit to keeping the deficit in public finances below 3 percent of GDP, experts told the CTK news agency.
The head of the board of supervisors of the Czech state-owned energy firm ČEZ, Martin Roman, has resigned. He has also stepped down as member of the board. Mr Roman, who served as the utility’s CEO between 2004 and 2011, gave no specific reasons for his decision; according to media reports, however, the company’s former boss might want to avoid being held responsible for some of the firm’s controversial deals including the sale of one of the firm’s subsidiary, I&C Energo, and ČEZ’s role in the country’s solar boom relying on massive state subsidies. The position of the board of supervisors’ head will temporarily remain vacant, the Finance Ministry said.
In Business News: the 2013 state budget deficit may be substantially below target, business confidence in the Czech economy has increased, the Czech Central Bank governor has been voted Central Bank Governor of the Year for Emerging Europe 2013 and Canada’s decision to lift visas for Czechs is expected to renew airline connections and revitalize travel.
The person most likely to become the Czech Republic’s next finance minister has set off a debate about the country’s foreign policy priorities. Speaking at an economic forum, Jan Mládek of the Social Democrats said criticism of Russia and China could cost thousands of Czech jobs. Critics say human rights have to come before exports.
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