Business News

Photo: European Commission

The Czech government approved an updated convergence programme for euro adoption, but still no target date in sight; The Czech National Bank board raised its key interest rate by a quarter of a percentage point to 3.5 percent and Czechs are making more money - the average wage in the Czech Republic is up by 7.6% year-on-year.

Government approves updated convergence programme

Photo: European Commission
The Czech government this week approved an updated convergence programme for euro adoption, without setting a specific target date for euro entry. The plan envisages gradual cuts in the country’s public finance deficit – from an estimated 2.9% of the GDP next year to 1% of GDP in 2013. Originally the 1 percent deficit was to have been reached in 2012. In view of the strong crown Czech exporters have been pushing for the government to set a specific target date for euro adoption, but the prime minister has made it clear that health and pension reforms would have to be approved and implemented before the country can join the euro-zone. A group of independent economic experts recently issued a statement saying they considered 2013 to be a realistic target date.

Czech National Bank raises key interest rate

The Czech National Bank board raised its key interest rate by a quarter of a percentage point to 3.5 percent on Thursday. The latest rise is the fourth this year, bringing Czech interest rates to their highest level in five years. Board members had hinted earlier that fears of rising inflation could force them to increase the cost of borrowing. On the other hand, the Czech crown has climbed to near record highs against the euro and dollar, with exporters calling for the bank and government to take action to weaken the currency and help safeguard their markets.

Average wage goes up

The average wage in the Czech Republic went up by 7.6% year-on-year in the third quarter of 2007 to 21,470 CZK (nearly 1,200 USD). This means that, on average, Czechs are earning over 1,500 crowns more than they were at this time last year. Wages rose in the private sector by 7.6%, while this rise in the public sector was closer to 7.5%. Those enjoying the biggest pay rises, according to the Czech Statistical Office, were mechanics, waiters and gamekeepers. The lowest growth in wage was recorded in the fishing industry, with employees only earning 2.1% more now than they did at this time last year.

Most valuable Czech brand names

Škoda Scout
According to research conducted by the daily Hospodarske noviny, the most valuable Czech brand name is that of Skoda Auto. Second on the list of brands is state-owned brewer Budejovicky Budvar. And it’s another brewer which comes third in the list, this time Plzensky Prazdroj. The list was compiled by 40 experts on advertising, marketing, finance and law. According to analyst Ales Michl, trademarks can account for anything between 20% to 50% of a firm’s value. Other brands which made an appearance in Hospodarske noviny’s list of top trademarks were Staropramen, Bohemia Glass and Kofola.

Mixing of bio-fuels with petrol may be delayed

Photo: European Commission
The mandatory mixing of bio-fuels with petrol which was scheduled to begin in January is likely to be delayed because the relevant legislation will not be ready, the daily Hospodarske Noviny reported this week. Refining companies are ready in terms of technology. The price of diesel oil to which bio-fuels are added has now reached 31.82 crowns per litre, surpassing the cost of petrol which sells at 30.97 per litre on average.