Business News

In this week's Business News: despite economic woes, budget deficit lowest in 11 years; nuclear plant generated record power in 2008; Czechs lured by weak pound, London sales; agriculture in the black and Czechs good at handling money, says report.

Despite economic woes, budget deficit lowest in 11 years

The Czech finance minister, Miroslav Kalousek, has reported that in 2008 the Czech Republic had its lowest budget deficit in eleven years. The reported deficit for the just-finished year is 20 billion crowns, significantly below the 70 billion crown deficit that had been estimated by the Finance Ministry itself back in the summer. Both stronger revenues as well as spending cutbacks resulting from government reforms are credited with the figure, which puts the country on a strong footing to meet Euro adoption criteria – although any plans to follow Slovakia, which just joined the Eurozone – are far from concrete. The Finance Ministry has also reported that the strong 2008 figures will allow it to have more money available to fight the effects of the global economic crisis, something which is certain to lead to higher budget deficit figures next year.

Nuclear plant generated record power in 2008

The Czech Republic’s Dukovany nuclear power station produced a record amount of electricity in 2008, according to its own figures. According to the numbers, 14.434 billion kilowatts were generated by Dukovany in 2008, a record figure, which represents a 3 percent increase on 2006 figures and a four percent increase on 2007 figures. The impressive results are attributed to modernisation at the plant which has resulted in greater efficiency and fewer shutdowns. Dukovany was put in operation in 1985, with an expected lifespan of thirty years, although operator ČEZ is said to be considering increasing that significantly. A greater reliance on nuclear power is often proposed as a means of tackling the Czech Republic’s future energy obligations – something opposed by anti-nuclear campaigners as well as the coalition Green Party.

Czechs lured by weak pound, London sales

Czechs are among those heading to London to take advantage of the city’s post-Christmas sales, according to the Czech daily Hospodářské Noviny. This is taking place against a backdrop of a strong crown – trading at around 27 crowns to the pound, as well as a weak British economy seeking to boost spending by slashing prices. Whereas such trips would have been reversed only a few years ago – with Brits flying for bargains to the Czech Republic – shifting fortunes now mean that Czechs have the means to spend on travel. Sales of up to 70 percent in Britain have also helped to tip the scales. Further, Hospodářské Noviny reports that Czechs are also increasingly making use of British online retail stores, which according to reports have a far greater selection compared to the Czech Republic; with postage costs of around 100 crowns seemingly well worth the price.

Agriculture in the black

Czech agricultural produce is expected to end the year with a profit of between 7-9 billion crowns according to figures from the Czech Statistical Office. Czech farming gains heavy subsidies from both the Czech government and the EU, totalling an estimated 24 billion crowns in 2008, with around 120 billion crowns worth of produce grown. Last year’s profit figures were 13 billion, suggesting a significant fall in profits in the industry, some of this attributed to increased energy costs, as well as growing costs of everything from seeds to fertilizer. Grain and cattle produce production fell by around ten percent in 2008, with increases in milk production, poultry farming and several other sectors. According to Eurostat figures, the Czech Republic ranks 11th in Europe in terms of wages earned by agriculture labourers.