Business News

Foto: Barbora Kmentová / Radio Praga

In Business News this week: Czech economy set for sluggish recovery; Czech central bank interventions controversy continues; fast mobile frequencies auction yields no new operator; Czech tax regime among world’s most complicated.

OECD: Czech economy in for sluggish recovery

Photo: Barbora Němcová,  Radio Prague International
The Czech economy’s long heralded recovery could turn out to be slower than previously expected, according to the latest figures from the Czech Statics Office. After 0.6 growth registered in the second quarter of this year, GDP contracted by 0.5 percent in the following quarter. The OECD, meanwhile, predicts a 1.5 percent contraction for the economy this year, down from its previous forecast of 1-percent contraction. The international organization also revised downward its forecast for 2014 to 1.1 percent growth. The Czech National Bank is a little more optimistic, suggesting that, thanks to its massive forex interventions, the Czech economy will grow by 2.1 percent next year. However, on Friday, the bank’s governor, Miroslav Singer, warned the economy was “at best only moving along the bottom”, and could return to recession.

Czech central bank’s forex interventions controversy continues

Photo: archive of Radio Prague
The Czech central bank’s moves to weaken the Czech crown continue to be the subject of controversy, three weeks after they began. The bank’s officials argue the step will eventually help economic growth by increasing the revenues of Czech exporters and boosting household consumption. However, others say a weaker crown has already caused the prices of some goods and services to rise. Prices of petrol and diesel last week grew by 0.4 and 0.3 crowns per litre, respectively, while the carmaker Škoda Auto said it was increasing its prices. Czech travel agents expect a 10-percent increase in the prices of package tours next year and the interventions could also raise the prices of food, real estate, and other commodities. A Czech senator has even petitioned the secret service, the BIS, to investigate the interventions, which allegedly harmed the country’s economic interests.

Mobile frequencies auction yields no new operator

Photo: Barbora Kmentová
An auction of fast 4G mobile frequencies held earlier this month yielded no new mobile phone operator, the news agency ČTK reported this week. The three existing operators, Telefónica O2, T-Mobile and Vodafone, purchased the frequencies for a total of 8.53 billion crowns, or around 250 million US dollars, while two other bidders, Revolution Mobile and Sazka Communications, did not buy any of the frequencies offered. The auction brought in some 1.5 billion crowns less than expected by the Czech telecommunications regulator. The operators say they will start building the new 4G mobile network in mid 2014.

Czech tax regime among world’s most complicated

Photo: archive of Radio Prague
The Czech tax regime is one of the most complicated in the world, according to a joint study by the World Bank, the International Finance Corporation and the consultancy PricewaterhouseCoopers. Companies in the Czech Republic are expected to spend on average 413 hours processing their taxation documents in 2013. That is just as much as last year but in global comparison, the country dropped from 120th place to 122nd position. However, there has been a positive development over the last five years when the time firms need to work on their taxes has been cut by 517 hours, the Czech branch of PricewaterhouseCoopers said.

Survey: 91 percent of Czech men, 60 percent of women drink beer

Photo: Barbora Kmentová
Some 91 percent of Czech men and 60 percent of Czech women enjoy beer at least occasionally, according to a survey by the CVVM agency released on Wednesday. The results show that the number of beer drinkers has risen after two years of stagnation, mainly due to increasing popularity of beer mixes, or shandies, among young consumers. However, the average consumption of beer in the Czech Republic continues to decrease; in 2007, Czech beer drinkers had on average 9.5 half-litre glasses of beer a week while this year, the figure dropped to 7.6 glasses.