In this week’s business news: Unemployment falls; Czech Banking Association releases bleaker economic outlook for 2013; more Czech companies are moving to tax havens; Moravia Steel receives large fine for collusion in Germany; Kofola is considering expanding into Balkans; and government debt decreases in Q2.
Unemployment down again in June
Photo: Mohammed Shaker / Stock.XCHNG
Unemployment in the Czech Republic fell to 7.3% in June, compared to 7.5% in the preceding month. There were more than 540,000 people looking for work at the end of June, according to figures provided by the Labor and Social Affairs Ministry. The level of unemployment has been slowly but steadily decreasing since February, when it was 8.1%. Some analysts expect the number of vacancies to grow and unemployment to decrease in the upcoming months, though the start of next year may bring a reverse trend. In the summer months, jobless figures are traditionally kept low by seasonal positions in the travel, construction and agricultural sectors.
CBA issues revised economic outlook for year
Photo: Svilen Milev, Stock.XCHNG
The Czech Banking Association this week reduced its economic forecast for 2013. Due to the unexpected fall of the GDP in the first quarter of this year by 2.4%, the association says the economy will decrease by 0.8% by the end of the year, instead of the 0.2% that it predicted in April. Analysts say, though, that the economy should be picking up a bit the rest of the year, and next year a growth of 1.7% is expected. One of the economic indicators that have positively surprised economists in the past half a year was household spending. Export is also expected to play an important role in the growth of the economy in the next few months.
Number of Czech companies in tax havens grows
Seychelles, photo: Hansueli Krapf, CC BY-SA 2.5
There were 12,719 companies in the Czech Republic with owners residing in tax havens at the end of the first half of this year, according to figures issued by the consultancy Bisnode. Most of the companies that have registered in tax haven countries in the past six months preferred the Seychelles and Cyprus, but some chose Malta, Belize or Panama. Bisnode’s analysts say that the political instability and economic uncertainty may encourage more local companies to move to similar locations.
Moravia Steel fined in Germany for cartel deal
Photo: Barbora Němcová
The German anti-monopoly office has issued a 10-million-euro fine to Moravia Steel Deutschland, the daughter company of the Czech Moravia Steel. The fine was imposed due to alleged collusion of steel suppliers for the German railroads. Moravia Steel have said that they are ready to pay the fine, and that it will not directly affect the Třinec steelworks, which the company owns.
Kofola considers expanding to Balkans
The Czech soft drinks giant Kofola has begun talks with the Slovenian company Radenska with a view to buying the mineral water company, according to Hospodářské noviny. Radenska is one of the most successful mineral water producers in Slovenia and also has a strong position on the Croatian market. For Kofola, which so far has distribution companies in the neighboring Slovakia and Poland as well as in Russia, the deal could serve as an entryway into the Balkans. Last year the company had 2.7 billion crowns in gross profits.
Government debt decreased in Q2
Photo: Barbora Kmentová
The Czech Republic’s gross government dept decreased in the second quarter of this year by 37.5 billion crowns to 1.678 trillion. One of the main reasons for the decline was the repayment of 62.9-billion-crowns worth of state-issued bonds. Although this is a significant quarterly decrease, the debt did increase in comparison to December of last year by 10.5 billion crowns.
