Business briefs

IMF annual report on the Czech Republic sees favourable near-term outlook, Coalition gov't split on social security and rent deregulation; one-third of real estate companies expected to close by mid-2005; Foreign investor interest in Vitkovice Steel heats up.

Business briefs

IMF annual report on the Czech Republic sees favourable near-term outlook

In its annual report on the Czech Republic released this week, the International Monetary Fund said the near-term outlook for the country remains favourable, with growth expected to firm, based on robust exports and export-related investment. However, the IMF said the new Czech government should take decisive action in key policy areas in order to enable the economy to "realize its full potential." The IMF said that growth in the Czech Republic remains sluggish compared with the other accession countries.

Coalition gov't split on social security and rent deregulation

The Czech Republic's coalition government has postponed approval of its new program over policy differences. Prime Minister Stanislav Gross said the three parties of the coalition had failed to agree on issues such as social security reforms and rent deregulation. Analysts say the three parties will likely iron out their differences by August 24, when the government must be approved by parliament in a confidence vote, but say the ideological differences within the government are likely to cause continued difficulties in implementing radical reforms in key areas such as health care and pensions.

One-third of real estate companies expected to close by mid-2005

As many as one out of three of the estimated 3,000 real-estate agencies in the Czech Republic could go out of business within the next 12 months, due to declining demand for property, the business daily Hospodarske noviny reports. The Czech Republic has five times as many real estate agencies per capita as Germany, the paper notes, and sector analysts say a shake-up is overdue.

Foreign investor interest in Vitkovice Steel heats up

At least five companies have expressed serious interest in buying Vitkovice Steel, the Czech Republic's largest steel producer, which is due to be auctioned this autumn. The Czech government has said it expects to fetch at least $118 million for the company, which has been struggling against growing raw material prices, with pig iron costs up over 50 percent in the last year.