Business briefs

Budget deficit twice that which analysts had predicted, FinMin revises GDP growth estimate, Ernst & Young notes fall in CEE investment, Czech Railways to auction off property.

Business briefs

CR posts trade deficit twice that which analysts had predicted

According to data from the Czech Statistical Office, the Czech Republic posted a foreign trade deficit of 0.9 billion crowns in May, the first month after the country's accession to the European Union, nearly twice what most analysts had projected. The data are partly based on estimates, as many companies have failed to file reports, notes the business paper Hospodarske noviny, in part because they had to calculate new VAT rates and comply with various EU regulations. All businesses exporting more than 4 million crowns worth of goods or importing more than 2 million crowns' worth are now required to fill out Intrastat forms, which replaced customs declarations upon EU entry. The data show, however, that the trade balance was favourably influenced somewhat by trade in machinery and transport equipment, whereas the balance of trade in consumer goods dropped significantly.

FinMin revises GDP growth estimate

The Finance Ministry has revised upwards its estimate for GDP growth until the year 2007, following the recent Czech Statistical Office's own revision of data. The ministry now predicts that the deficit-to-GDP ratio will shrink faster, to 3.3 per cent instead of 3.5 per cent of GDP in 2007. The government hopes to bring the ratio down to 3 per cent by 2008, in line with the requirements of the EU's "Stability and Growth Pact."

Ernst & Young notes fall in CEE investment

Photo: European Commission

The EU Accession countries suffered a fall in inward investment during 2003, but only because of the flurry of activity in the last few years ahead of the May 2004 expansion of the EU to 25 member states. According a new study by the accounting firm Ernst & Young, after strong growth in 2002 the number of foreign direct investments into the EU accession countries fell by 17% in 2003. There were 274 major investment projects in the accession countries announced last year, said the firm, with 4 out of 5 of them either in the Czech Republic, Hungary or Poland. Most were new manufacturing projects rather than expansions. Within the EU, France was the most popular country for establishing automotive components plants, said Ernst & Young, with 20% of the total investment in this sub-sector, followed by the Czech Republic with 18%.

Czech Railways to auction off property

Real estate owned by the state railway operator Ceske drahy will be sold through a tender, the weekly magazine Euro writes. Decisions have already been made about the sale of railway stations in Prague's districts of Bubny, Dejvice, Vrsovice and Liben, the weekly quotes Deputy Transport Minister Vojtech Kocourek as saying. Ceske drahy also wants to call a tender for a strategic partner for the revitalisation of Prague's Smichov railway station.