Business News

In Business News this week: the Czech economy grew by a record 6.5 percent last year; as the crown sets even more record highs to the dollar and euro, the governor of the central bank says he is puzzled by the Czech currency’s strength; Czech firms paid out record dividends in 2007, with over two thirds going abroad; Petr Kellner is now among the richest 100 people in the world; food exports have grown considerably; and a food quality system is proving beneficial for Czech producers.

Economy grows by record 6.5 percent

The Czech economy grew by a record 6.5 percent in 2007, according to figures released on Friday. That means GDP growth has reached 6 percent or more for three years in a row. Economists have attributed that success to increases in consumption, investment and foreign trade.

Central bank head puzzled by continued firming of crown

The Czech crown, which has firmed by 6 percent since the start of 2008, this week again set record highs to both the euro and the dollar. But the governor of the country’s central bank told an economics conference he was puzzled by the trend; Zdeněk Tůma said there were no objective reasons for the current fast appreciation of the crown and that he expected a correction. Mr Tůma said in past years the crown had weakened in anticipation of dividend outflows, and it was likely to do so again.

Czech firms pay out record dividends, with two thirds going abroad

In related news, Hospodařské noviny reported on Friday that Czech firms had paid out a record CZK 158 billion in dividends last year, with over two thirds going abroad. Economist David Marek told the newspaper the record dividends were due to the expansion of production and export capacity backed by foreign investments. As well as fast economic growth the volume of dividends was boosted by retained earnings from previous years.

Kellner makes top 100 on Forbes billionaires list

The richest Czech Petr Kellner is now among the 100 wealthiest people in the world. Kellner is ranked 91st in the Forbes magazine 2008 list of the world’s billionaires, up from 119th last year. The man behind the PPF investment group has total assets of USD 9.3 billion, according to Forbes. But he could be even richer: his closest partner at PPF Jiří Šmejc said the magazine had obviously underestimated Kellner’s wealth.

Food exports up 85 percent in five years

Czech food exports have grown by 85 percent in the last five years, the state agency CzechTrade said this week. Most interest comes from the Czech Republic’s neighbours, as well as former Soviet countries and southeast European states.

Food quality symbol leads to increased sales for producers

Meanwhile, a food quality symbol system introduced on the Czech domestic market five years ago seems to be working: food producers which have attained the KLASA quality certificate record rises in sales of around one third, Právo reported. A survey suggested around 80 percent of consumers regard the KLASA symbol positively, while producers say it makes their foodstuffs more attractive to retail chains.