Business News


The International Monetary Fund's senior official in Prague says the Czech economy will not be able to sustain its current high growth unless key reforms are made to the country's public finance, pension and health systems. The IMF's Juan Jose Fernandez-Ansola said now is a good time to implement such reforms, given that the economy is growing and inflation remains low.

Photo: European Commission
The first deputy finance minister, Eduard Janota, has warned that the Czech Republic may not be ready to adopt the euro by 2010 if the public finance gap cannot be reigned in. The ministry estimates that it will grow by between 4.8 and 5 percent this year, up from 3 percent in 2004. Mr Janota says that cuts of around 25 billion Czech crowns will have to be made next year.

The Czech Republic this week signed a new trade agreement with Russia. Czech exports to Russia are set to rise sharply this year, and should exceed one billion dollars. The new agreement - on financial, industrial and technological co-operation - should further ease trade between the two countries. Deputy Industry and Trade Minister Martin Tlapa said it would help Czech companies make a much greater impact on the Russian market.

The Czech Republic's prefabricated blocks of flats - which house 40 percent of the population and are known colloquially as "panelaks" - are in need of major investment. So there was welcome news this week when the European Parliament's committee for regional development expressed support for a proposal by Czech MPs for subsidies to repair "panelaks" from the EU's 2007-2013 budget. The Czech government has already spent over 3 billion crowns since 1998 on repairs to a tenth of the country's prefabricated flats.

Several Czech banks are lauching major campaigns to advertise credit cards, which until recently were something of a rarity in this country - in fact five years ago only 40,000 Czechs had credit cards. Last year that figure stood at almost 400,000, and banks predict further growth of 50 to 60 percent a year.

A new form of advertising is set to enter the Czech market. "Walkboards" as they are known are adverts embedded under thick glass in the pavement, and will soon be seen both in the pedestrian zones of several cities and at out-of-town shopping centres. The "walkboards" will be lit up 24 hours a day.

Some consumer goods are more expensive in Prague than in other European Union capitals, according to a survey by consumers' organisation CEC. For instance Levis 501s jeans cost less in Paris, Vienna, Madrid and Brussels than in the Czech capital. Perfumes are also relatively expensive in Prague. In fact Prague is only cheapest when it comes to sightseeing bus tours, the study found.