Business News

In this week’s business news: The Czech national debt has risen by almost 10 percent in the first half of 2012; Real estate prices are dropping for the second quarter this year, while land prices are on the rise; Škoda Auto will introduce a new Fabia specifically for the Indian consumer; Fuel prices are breaking record highs again this week; a number of operational programmes in the Czech Republic will not get the EU funds they were counting on.

National debt rises in H1 of 2012

The national debt of the Czech Republic has grown by 136 billion crowns in the first six months of this year, to 1.636 trillion, according to the Finance Ministry. The internal debt grew by 88 billion to 1.27 trillion crowns, while the external debt grew by 48 billion to 3.65 trillion crowns. The per capita debt at the end of June amounted to almost 156 thousand crowns. Last year, the total national debt came out to 1.49 trillion crowns.

Market prices of apartments continued to drop in Q2

The market prices of apartments continued to drop in the second quarter of 2012, according to figures by the Czech Statistical Office released on Thursday. The prices of older flats decreased by 5.7 percent while the prices of new apartments in Prague fell by 3.4 percent. Analysts claim that the continuing slump in apartment prices is partly due to the cheaper new construction projects and discounts that developers are increasingly offering in the sluggish real estate market. There is increasing interest, though, among Czechs in purchasing plots of land as a way to invest and save money, which is forcing prices of land to go up.

Škoda to create a new local version of Fabia for India

Foto: Škoda Auto

Automobile producer Škoda Auto plans to make a new local version of Škoda Fabia for the Indian market. The Mladá Boleslav-based company wants to have most parts for the new model to be made in India, in order to decrease prices and up the sales. This year, Škoda has sold about 300 Fabias per month in India, while last year the number was five times higher. By introducing a cheaper model with more affordable locally produced replacement parts, the company is hoping to eventually increase sales to 8,000 Fabias per month. Škoda Auto has already been successful in introducing a specifically Indian model of Škoda Rapid last year.

Fuel prices are still on the rise

Photo: Khalil Baalbaki

Petrol prices have gone up again this week, after fuel prices stagnated briefly last week. The average price for Natural 95 petrol rose by 34 hellers from last week, to 38.51 crowns per gallon per liter. The average price in Prague was at 39.28 as of Thursday. The price of diesel has actually gone down, but only by one heller, to an average 37.17 crowns per liter.

Operational programs will not get EU funds

The European Commission has refused to pay around one billion euros into four Czech operational programmes over errors in their administration, the news website Aktuálně.cz reported on Thursday. The subsidies have been cut for the Transport, Environment, Enterprise and Innovation programmes as well as for the Regional Operational Program South-West. The programmes will have to be subsidized from the state budget and the budget of two regional authorities. The website reported that funding might also be cut for other Czech operational programmes.