Business News

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Later on, we'll be asking economic analysts what impact they expect the New York tragedy will have on both the global and the Czech economy. But first, let's quickly run through some of the latest news and statistics.

Inflation down in August The Czech inflation rate reached 5.5 percent year-on-year in August. In monthly terms, inflation dropped by 0.2 percent. So-called net inflation, which eliminates the influence of administrative price regulation, was -0.3 percent month-on-month, and 4.1 percent year-on-year. The figures were influenced mainly by a decrease in prices of foodstuffs and beverages, and stagnation or decrease of most of the other prices in the consumer basket. On the other hand, the Czech Statistics Office reported an increase of prices in travel, drinking water and pharmaceutical products. Unemployment stagnates The unemployment rate in the Czech Republic stagnated at 8.5 percent in August, half a percentage point lower than in the same month of 2000. The labour offices recorded 443,000 job applicants at the end of August, nearly four thousand more than at the end of July. There was a slight increase in the percentage of school graduates enlisting at labour offices. The lowest unemployment rate was, as usual, to be found in Prague and surrounding Central Bohemian regions - between two and four percent. On the other hand, the highest number of people out of work was reported in North Bohemian and North Moravian coal-mining and heavily industrialised regions, with the absolutely highest unemployment in the region of Most - over 21 percent. Industrial production accelerates Industrial production in the Czech Republic accelerated by 9.3 percent in July, up from a 3.7-increase in June. Industrial sales rose by 5.7 percent year-on-year. UMTS licence auction may be postponed The Czech Telecommunications Office has proposed that the cabinet postpones the granting of UMTS or third-generation mobile network licences by two months. Originally, licences were to be sold to applicants by the end of September. However, the chairman of the office, David Stadnik, says the date of an auction in the Czech Republic to sell remaining licences would coincide with a public tender for the UMTS licences in Denmark, so that major foreign operators would be unlikely to participate in the Czech auction. Privatisation of Telecom may be postponed On a similar note, and the Czech government is considering postponing the privatisation of its majority stake in the Czech dominant fixed-line operator Czech Telecom until next year. The minister of finance was supposed to present the results of a public tender by the end of October. However, the procedure has been complicated by the unfinished full acquisition of mobile operator Eurotel by Czech Telecom. Economic impact of US crisis The tragedy in the United States on Tuesday had an immediate impact on the world's financial markets. The news sent all European stock exchanges plummeting and the Prague Stock Exchange was no exception. On Tuesday afternoon local time and then again on Wednesday, Czech stocks fell to a three-year low. Wednesday saw trading on both the Prague Stock Exchange and the RMS stock exchange suspended by around two hours. Economic analyst Ondrej Schneider from Patria Finance says it is difficult to asses the full scope of the impact the tragedy in New York will have on the global economy and subsequently on national economies. Economic expert Evzen Kocenda from the Czech National Economy Institute says the Czech economy will be affected in several ways: Mr. Kocenda says the Czech Republic is also likely to suffer from a possible weakening of the US dollar and a drop in foreign direct investment.