In this week’s Business News: the Czech Republic finds itself in a recession; women are earning a quarter less then their Czech counterparts; bankruptcy declaration reach a four year high; computer sales are set to soar in 2012 and a new law is giving the government the muscle to tackle shady employment practices.
New data shows Czech economy is technically in recession
Photo: Barbora Kmentová
Newly released figures from the Czech Statistics Office show that in 2011, the Czech economy grew by 1.7% year-on-year. The data also shows that fourth quarter growth for 2011 was a mere 0.6% year-on-year and fell by 0.1% against the previous quarter. Initial estimates for February GDP growth were a relatively anaemic 0.5%. Technically, the data suggests that the Czech Republic is now in a recession, with two successive quarterly falls in GDP growth, according to Raiffeisenbank analyst Václav Franče, cited by ČTK. Franče also predicts that 2012 will see an overall 0.2% fall in Czech GDP. The first two quarters of 2012 are expected to be the toughest, with improvements in the Czech economy not forecast by analysts until the end of the year. Meanwhile, data from the Czech Statistics Office also showed inflation up to 3.7% year-on-year against January’s 3.5%. Rises in food produce prices – specifically vegetables and eggs – are believed to be the most significant factors behind this latest rise in inflation levels.
Study: Czech women earning a quarter less than their male counterparts
Photo: Tomáš Adamec, Czech Radio
Czech women earn an average of 24% less than their male counterparts according to a study undertaken by platy.cz. While the average monthly pay for men is 27,924 crowns, for women the figure is 21,302 crowns. Differences between the professions undertaken by Czech men and women play a factor in this disparity, but if this is factored-in, Czech men still earn 10% more than women for doing the same jobs. The greatest gender pay gap is in operational management positions, where men early an average of 29% more than their female counterparts. Age factors also play a role, with a 16% gender pay gap in the 17-24 age category; the 35-44 age group showed the greatest gap of 21%.
Four year high in companies seeking bankruptcy
287 companies declared bankruptcy in February, according to the company Czech Credit Bureau, the largest number since the start of 2008, when new bankruptcy laws came into effect. Conversely, declared personal bankruptcies were down by 7% year-on-year, with 1,217 people declarations. According to CCB, applications for both forms of bankruptcy were even higher than declared bankruptcies, suggesting that even more companies are expected to go under in the ensuing months. In February, 657 bankruptcy filings by companies were made, up 59% year-on-year. The greatest levels of these filings were in the Moravian-Silesian district, with 63 cases, and in Prague with 47 cases. Applications for personal bankruptcy in February were up 17% from the previous month and up 77% year-on-year.
Computer sales expected to jump in 2012
Czech computer sales are expected to jump by 16% this year according to the technology research company Gartner. The company predicts that 1.3 million computers will be sold in the Czech Republic in 2012, with sales representing 14.4 billion crowns, up from 12.9 billion on 20111. They also predict that the average price of a computer will fall by 440 crowns to 11,080 crowns; by 2015, average prices are expected to fall to just over 10,000 crowns. Gartner also expects global demand for computers to grow by more than 4% in 2012 with a total of 368 million units. A growth in the market for tablets and smartphones is reportedly partly responsible for the surge in demand.
Authorities clampdown grey market in employment
Illustrative photo: Czech Television
Increased efforts by the authorities to clampdown on the grey market in employment have yielded results, according to reports. A new law came into effect in January designed to expose employers who are using shady practices to bypass social security, health payments and other tax obligations. Czech authorities now have double the number of inspectors – 660 people - to carry out spot checks and issue fines. According to the State Labour Inspectorate, 1700 checks have taken place since the start of the year, with three fines issued so far totalling 870,000 crowns. Others, they say, are forthcoming with 120 companies apparently implicated in shady employment practices. According to the Inspectorate, breaches in the law have been found at around 70% of companies checked.