Business News


In Business News this week: more gloom from the number crunchers; a silver lining from the central bank; charges stack up against local banks; EU funds spark gas storage scramble; and a bid for a scrap law for old furniture.

Unemployment and inflation rise as trade surplus shortens

A raft of figures this week showed Czech inflation and unemployment up and the country’s trade surplus down. The Czech Statistical Office announced annual inflation speeded up to 2.3 percent in March from February’s 2.0 percent. But analysts see the figure easing in the coming months. The unemployment rate in March rose to 7.7 percent from 7.4 percent in February. And the Czech Republic’s trade surplus eased to 8.7 billion crowns in February, around a third lower than its level a year earlier.

Central bank governor sees recovery in 2010

Zdeněk Tůma and Miroslav Kalousek,  photo: CTK
But the governor of the Czech National Bank, Zděnek Tůma, has said that the Czech economy should pick up next year. Mr Tůma warned however in an online interview this week with the magazine Respekt that the next six months will continue to be very tough for the local economy. He said the full impact of the economic crisis has still to be felt. The bank governor cautioned at the end of March that the export oriented Czech economy could shrink by up to 2.0 percent this year if West European economies slide deeper into recession.

Survey highlights high charging Czech banks

Photo: archive of ČRo 7 - Radio Prague
An international study has given Czechs even more reason - if they needed it - for disliking banks and bankers. The World Retail Banking Report 2009 confirmed this week what many have complained of for a long time – that they are paying through the nose for banking services. The survey revealed that Czechs are on average paying 188 crowns a month in banking charges. That is 19 percent higher than people in mostly richer European countries which have adopted the euro. And while bank charges in the euro-zone decreased on average by 6.1 percent last year, they rose in the Czech Republic by 3.0 percent during 2008.

Dash for EU gas storage cash

A gas war has broken out in the Czech Republic according to the business paper E15. It says the country’s biggest gas importer and distributor, RWE Transgas, is pitted against local oil and gas company, Moravské naftové doly, in a scramble for European funds for new gas storage plants. The EU earmarked 35 million euros in March to help boost Czech gas storage capacity as part of its economic anti-crisis package. The paper says both companies are armed with ready made projects and want to make a grab for the EU grants. More gas storage plants are part of Europe’s strategy for protecting itself against a sudden cut off in supplies.

Furniture makers table their own scrap incentive proposal

Photo: archive of Radio Prague
And finally, with scrap car incentives all the rage across Europe and now in the Czech Republic, the Czech Association of Furniture Manufacturers is seeking to get on the bandwagon. The association has come up with a call for a special furniture scrap law to help its crisis hit sector. The association’s secretary Tomáš Lukeš says the government should offer a 15,000 crown incentive for old furniture to be traded in for new. One condition is that owners would have to prove their furniture is over 10 years old by producing the original proof of purchase or get a declaration to that effect from an expert. Mr Lukeš says Czech furniture makers deserve help because they employ around 37,000 people with annual sales of around 62 billion crowns.