Business briefs

PM Gross calls for mandatory private retirement plans, OECD says social mobility in the Czech Republic stagnant due to limited access to higher education, City of Ostrava begins spending 100m from bond issue, and FinMin expects GDP of 3.2 pct next year, 10.4 pct unemployment.

Business briefs

PM Gross calls for mandatory private retirement plans

Stanislav Gross, photo: CTK

The newly appointed Prime Minister, Stanislav Gross, is pushing for mandatory retirement savings plans as part of the overall reform of the pension system, which is due to begin in 2006. The Czech population is rapidly aging and the average retiree receives a pension of less than $290 per month, which is less than half the net salary of an average worker and therefore below the minimum ratio set by the International Labour Organisation. Currently, roughly every fourth adult Czech has a private pension policy and the Social Democratic party headed by Mr Gross is looking at offering tax relief to individuals and companies to encourage savings.

OECD says social mobility in CR stagnant due to limited access to higher education

Young Czechs have less chance to improve their social station than other OECD member states, a study by the Paris-based Organisation for Economic Co-operation and Development has found. Limited access to higher education is the biggest factor, sociologist Petr Mateju noted in an interview with the business daily Hospodarske Noviny, and is seen as one reason why the Communist Party and anarchist movements are increasingly popular with young people.

City of Ostrava to begin spending proceeds of 100m euro bond issue

Photo: European Commission

The northern Moravian city of Ostrava added 100 million euros to its budget this week, after a successful bond issue on Monday on the London bourse. It is the biggest loan the municipality has ever taken. Ostrava has 10 years to redeem the bonds. Initially, the municipality will use the money to repair and build motorways, as well as a new library, a retirement home and a sports hall. City councillors will meet in late September to agree on other uses for the money.

FinMin expects GDP of 3.2 pct next year, 10.4 pct unemployment

The Finance Ministry has said it expects GDP growth at 3.1 per cent this year and 3.2 per cent in 2005. The forecast is more optimistic than the previous estimates the ministry issued in April. Inflation should reach 2.9 per cent this year and 2.8 per cent in 2005, the Finance Ministry said in a macroeconomic forecast made public on its website. Unemployment is predicted to reach 10.3 per cent this year and 10.4 per cent next year.