In Business News this week: with Czech industrial output falling by 17.4 percent, the vice-governor of the central bank says growth this year could slow to as low as 0.5 percent; over two thirds of Czech firms say they are finding it harder to get bank loans; the number of foreigners joining the Czech workforce falls by 20 percent; the head of IKEA says the firm will open two new stores in the Czech Republic, including one of its biggest in Europe; and more Czech banks are to introduce smart ATMs.
Czech industrial output plunges as impact of global crisis felt
Photo: archive of CRo 7 - Radio Prague
The latest figures for Czech industrial output, released this week, make for sobering reading: there was a fall of a whopping 17.4 percent in November, described as the largest annual drop in industrial output in the history of the Czech Republic. The fall was far greater than forecasts of around 9 percent, and is due to the drop in demand from the euro zone, with a decline in car exports having a particularly strong impact. The global financial crisis has begun hitting the previously fast-growing Czech economy in recent months, leaving growth projections for this year modest. In fact, vice-governor of the Czech National Bank Miroslav Singer said on Wednesday that the new data could mean that GDP growth would reach only 0.5 percent, matching the bank’s “pessimistic” scenario for 2009. The central bank’s baseline scenario sees growth of 2.9 percent.
Survey: over two thirds of firms finding it harder to get loans
Over two thirds of firms in this country are now finding it harder to get loans from banks, suggests a survey carried out by the Czech Chamber of Commerce published in Ekonom. The president of the chamber, Petr Kužel, told the weekly that many firms are actually getting loans; however, they are at higher interest rates, or are not the complete amount the companies are applying to borrow. For their part, the banks say providing easy loans would be a big gamble in view of the November industrial output figures and the overall economic situation.
Inflow of foreign workers falls by 20 percent
Illustrative photo: Czech Television
The inflow of foreign workers in the Czech Republic fell by 20 percent in 2008, according to Labour Ministry figures released this week. Whereas 55,000 foreigners joined the country’s labour force in 2007, last year that figure was just over 44,000. Some Czech businesses have begun laying off non-nationals, and a government green card scheme launched this month applies to fewer states than originally envisaged. Unemployment was at 6 percent in December and is expected to rise during 2009.
IKEA planning more Czech stores, including one of biggest in Europe
Photo: CTK
The Swedish furniture retailer IKEA is planning to open two new stores in the Czech Republic in the next five years, the company’s president Anders Dahlvig told the newspaper Hospodářské noviny this week. The first will have an area of 35,000 square metres, making it one of the biggest IKEAs in Europe; it will be built only a few metres away from an existing store at Zličín on the outskirts of Prague, one of the four branches now in the Czech Republic.
More Czech banks introducing smart ATMs
Exactly 20 years after the first ATM was unveiled in this country, Hospodářské noviny reported this week that we can expect a rise in the number of what are called smart ATMs this year. The bank machines allow users to not only withdraw money and check their balance, but also to lodge cash into their own and other people’s accounts and make transfers, for instance to pay bills. Česká spořitelna is planning to install at least 10 new smart ATMs, while GE Money and ČSOB are also going to introduce the service.
