Five bidders shortlisted in coalmine privatisation. CEZ excluded from Czech coal mine sale. Central Bank softens minimum reserves requirement for banks. Czech government keeps 2004 economic outlook but cuts budget gap forecast.
Five bidders shortlisted in coalmine privatisation
CEZ excluded from Czech coalmine sale
CEZ announced that it was not among the five investors shortlisted in the sale of the two brown coalmines. CEZ said in a statement it had received a letter from the National Property Fund adviser on the sale informing it that the power utility had been ruled out of the sale for failing to meet the basic competition requirements. It did not say which criteria were not met. CEZ already holds about 37 percent of Severoceske Doly and took part in the competition in order to protect its investment, which could be damaged when a large investors takes over the mining company.
Central Bank softens minimum reserves requirement for banks
The Czech National bank has made life easier for commercial banks by softening the minimum reserve policy. As of Thursday, November 6, banks will be able to include money in their cash accounts in the compulsory minimum reserves, so that they will need to deposit less money with the Central Bank. The measure makes it possible for commercial banks to invest the newly available funds and increase profits.
Czech government keeps 2004 economic outlook, cuts budget gap forecast
The Czech Finance Ministry announced that it had not changed its economic growth and inflation forecasts for next year, but said the fortunes of the economy hinged on a global recovery. The ministry predicts that GDP will grow 2.8 percent year-on-year in 2004 when the country joins the European Union. This year GDP is expected to rise by 2.5 percent, the ministry said in a quarterly update of its forecast series which forms the basis for budget projections. The ministry said in a commentary attached to the predictions that the risk for economic growth in both 2003 and 2004 remains the development of the external environment. Economic stagnation in the EU has kept a lid on growth in the export-dependent Czech economy. Analysts have said no sharp rebound is likely until a major recovery in key EU markets, and particularly neighbouring Germany, the Czech Republic's biggest trade partner.
The ministry also said the country's public finances would show a record deficit of 6.6 percent of GDP this year, lowering the estimate from a previous 7.0 percent. It saw the gap narrowing to 6.2 percent next year when it hopes a package of fiscal reforms to take effect. The measures include increases in indirect taxes and cuts in welfare spending. The Czech Republic needs to reduce its widening public finance deficit below three percent of GDP before it adopts the single European currency in 4 to 6 year's time.