Business News

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This week in Business News: Consumer prices dropped in June, along with inflation rate; Study shows that many key sectors still have very few women in management; Construction and industrial output down in June; New tougher regulations on alcohol distribution go through lower house; Businesses would mostly welcome early elections in hopes of a more stable political and economic situation.

Consumer prices dropped in July, bringing yearly inflation figures down

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Consumer prices have decreased in July by 0.2 percent, bringing the year-on-year inflation growth down by 1.4 percent, according to figures released by the Czech Statistical Office. Analysts had expected that the yearly inflation would actually rise after the second quarter, and some say the Czech National Bank is likely to stage a currency intervention in order to weaken the crown. According to the statisticians, monthly decrease in costs was primarily due to the dip in the prices of vegetables, which was 13.8 percent, and small decreases in the prices of fruit, poultry, eggs and mineral water. On the other hand, recreation and culture saw a 12.5 percent jump in July, compared to the preceding month. Despite the decrease in inflation, prices of some basic food stuffs did increase year-on-year, along with the rent and energy prices.

Study: Too few women in top management of Czech companies

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According to a study released by Deloitte Corporate Governance Center this week, banking is the least friendly sector for women in management. In the twenty biggest banks in this country, there are 88 men in top positions and only four women. In healthcare, though, women make up about a quarter of all top managers and directors. The study looked at high management of the top twenty companies in nine key sectors of the Czech economy. Overall, the percentage of women in these positions was around eight percent, well below the EU average of 13.6 percent. Almost all of the top Czech companies are strongly opposed the EU regulation, which wants to introduce 40 percent quotas for women in top management of publicly traded companies starting in 2020.

Construction and industry continue downward trend

Photo: Kristýna Maková,  Czech Radio
Although warmer weather has brought a bit of relief, the Czech construction sectors is still doing worse this year than last. The monthly improvement of 1.3 percent in construction output in June, still left the sector with an 11.1-percent decrease, year-on-year. The floods in June also worsened the situation in industry, where output fell by 5.3 percent, in comparison with 2012. For the whole of the second quarter of this year, industrial production fell by 2.4 percent, year-on-year. Analyst Petr Dufek, from ČSOB, said that the forecast for industrial output growth in the next few months still remains moderately positive.

New alcohol regulations approved

Photo: Barbora Kmentová
The lower house of parliament approved an amendment that introduces stricter rules about the sale of hard liqueur, responding to the methanol poising scandal last year. The amendment lowers the allowed maximum volume of containers for hard alcohol sold in stores from six liters to one liter and three liters for glass bottles. The bill imposes a five-million-crown fine for breaking this regulation. It also stipulates that retailers and vendors of any distilled alcohol will now have to apply for a license. The lower house rejected a proposal to also introduce electronic chips, which would mark each bottle and provide information about its source. In a series of methanol poisonings, which started last September, some 40 people died, while this year the number of victims was put at nine.

Companies mostly welcome early elections

Photo: Kristýna Maková
Many Czech companies would welcome early elections in hopes that it would stabilize the political situation, according to a poll carried out by the Czech News Agency ČTK. On the other hand, the agency noted, many entrepreneurs are worries about an increase in taxes, in case the left wins the elections. Companies are eager for the government and parliament to settle down and begin deliberating on necessary legislation and stabilizing the economy. The chairman of the Czech association of exporters, Jiří Grund, said that the current situation decreases the country’s credibility abroad and may discourage foreign investors.