Business News
Unemployment rate continues to fall
The Czech unemployment rate in March fell to 8.7 percent, down from 9 percent in February. In March 2000, the unemployment rate stood at 9.5 percent. This positive trend had been expected by analysts. The lowest unemployment rate is, as usual, in Prague and central Bohemia - around 3 percent, while 7 North Bohemian and North Moravian regions, which have a high ratio of heavy industry, have reported unemployment figures of 16 to 21 percent.
CPI rises slightly
The Consumer Price Index in March reached 4.1 percent year-on-year, up from 4 percent in February. Economic analysts had predicted a stagnation in the figure or a slight decrease. Net inflation, which the Central Bank uses as a deciding factor for its policies, stagnated in March at 2.9 percent year-on-year.
Central Bank changes inflation targeting system
The Czech National Bank has decided to change its system for targeting inflation. It will switch from net inflation to the overall inflation rate. This should make it easier for the Central Bank to adapt its policies to meet inflation targets. The bank has also set an inflation target for next year, of 3 to 5 percent, with a goal to cut inflation to 2 to 4 percent in 2005. The Central Bank has been using inflation targeting since 1998, but has usually failed to hit the mark.
Industrial production growth slows down
Industrial production grew by 8.8 percent year-on-year in February. In January, the growth rate was 13.8 percent. Although the industrial growth has slowed down, analysts do not view the development negatively, because they believe the January result is somewhat exceptional. However, economic experts are unsure of future developments, as Czech producers will have to react to the deceleration of industrial growth in Western Europe.
Sewage treatment needs massive investment
The Czech republic will have to invest around 100 billion Czech crowns, or around 2.5 billion USD, to meet EU requirements for waste water disposal. The money should be spent on the construction of new water treatment facilities, enhancement of technology in existing sewage systems and building new ones. EU legislation requires that every municipality of more than 2000 inhabitants must have its own water treatment facility. In the Czech Republic, however, only municipalities of more than 10,000 inhabitants have such facilities.
What do the Chinese wear around their necks?
Czech customs officers have seized a cargo of around nine million cigarettes which were being smuggled to the Czech Republic. The cargo had been officially declared as neckties from China. If successful, the smugglers would have cheated the state budget of nearly 18 million Czech crowns in custom duties and taxes.
Finance Minister resigns
The biggest issue this week has been the surprise resignation of Finance Minister Pavel Mertlik. Mertlik was respected in economic circles as one of the few real experts in the cabinet and many politicians, financiers and analysts have expressed their regret at his departure. And of course, his opponents, especially from the ranks of right-wing opposition parties, have a reason to celebrate. I spoke to Mr Mertlik after he announced his resignation on Wednesday afternoon, and asked him what exactly were the reasons for his resignation.
