State budget expenditure cuts in the pipeline
The Ministry of Finance is planning an extensive reduction of expenditures in the state budget for the year 2002. Finance Minister Pavel Mertlik said the target was to cut the state budget deficit to 10 billion crowns from the current 46 billion. Mr Mertlik also said that the ministry was planning certain measures to provide for 11 billion crowns in excess of the planned state budget deficit in 2000.
Czech govt selects advisers for energy sector privatisation
The Czech National Property Fund has selected advisers for the sale of the country's electricity and gas companies, pushing ahead with their long-awaited privatisation. The fund picked a consortium of Deloitte and Touche and N.M. Rothschild and Sons for the sale of a majority stake in the main power producer CEZ and six power distributing companies. A consortium of Salomon Brothers International and Citibank will be responsible for providing advice on the sale of the monopoly natural gas importer Transgas and eight regional distributing companies.
FDI to grow further
The Czech government agency responsible for attracting foreign direct investment to the Czech Republic, has estimated that the inflow of foreign investment could amount to around 4 billion USD in 2001. The head of CzechInvest, Martin Jahn, said that the volume of FDI has been rising since 1998. Mr Jahn predicted further growth, depending on the progress of privatisation of the remaining state-owned companies. The Czech Republic has been a leader in the Central and East Europe as a target country for foreign investments.
Czech National Bank vice-governor Oldrich Dedek believes FDI is one of the main driving forces behind the acceleration of Czech economy. However, Mr Dedek warned that the inflow of foreign investment was so huge that the Central Bank is worried about monetary development.
Tatra to be sold by the end of the year
The Czech truck maker Tatra is expected to be sold to a strategic investor by the end of this year. Currently, the government holds a 90 percent stake in the company. According to Tatra CEO and board chairman, Petr Urban, state control complicates decision making and curtails business opportunities. At the moment, there are four potential investors interested in acquiring Tatra. After heavy losses in 1999 amounting to 2.6 billion CZK, Tatra returned to the black in 2000 with nearly 200 million crowns' profit. Production and sales have also risen, with the main markets in India, China, and Russia. Earlier this week, Czech Defence Minister Vladimir Vetchy negotiated on supplying around 800 Tatra trucks to the army of the United Arab Emirates.
Hypermarket boom in Czech Republic
Over the past two years, the Czech Republic saw a mass expansion of hypermarkets: technically speaking, big department stores with floor space exceeding 2,500 square metres. They attract customers with low prices and extra services, as they often don't stand alone but are located within larger shopping and entertainment centres. To date, more than 80 hypermarkets have been built across the country and by the end of the year the number is expected to exceed 100. The Trade and Industry Ministry says this is the current limit of purchasing power in the Czech Republic. Czechs have quickly got used to the new way of shopping and around 50 percent of them use hypermarkets and their smaller relatives, supermarkets. Most of the retail chains operating in the Czech Republic are multinational giants. My colleague, Daniela Lazarova, recently spoke to Simon King, the head of Tesco, which has been present in the Czech Republic for five years and is one of the biggest retail chains on the local market.
US-Czech agriculture trade
And staying with food, and as Simon King from Tesco said, whisky is a British product that has really caught on the Czech market. As far as food imports from across the Atlantic Ocean are concerned, Daniela found out that one of the most popular American products imported to the Czech Republic is peanut butter. She spoke to Paul Spencer, agricultural attaché of the U.S. Embassy in Prague.