Business News

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In Business News this week: Inflation is at a five-year high, with growth driven by food price increases; unemployment, meanwhile, is at a nine-year low of 5.8 percent; the cabinet is to discuss the Czech Republic's relatively low investment in science; the Czech Republic is becoming less competitive, says the EC, echoing a recent OECD report; and the first step is taken towards privatising Prague Airport.

Inflation at five-year high...

Inflation in the Czech Republic is now at a five-year high, accelerating from 2.8 percent in September to 4 percent last month. That growth is the highest seen since January 2002, and has been driven by food price increases. Milk has gone up by around 40 percent, while cheese, butter, flour and fruit rose by 10 percent year-on-year. Cigarettes, meanwhile, are almost 30 percent more expensive, while with the deregulation process underway rents are on average 10 percent higher. Analysts say they expect inflation to rise further - and that the Czech National Bank will increase interest rates this month and again in January.

...while unemployment falls to nine-year low

Unemployment in the Czech Republic is at a nine-year low. In October the jobless rate was 5.8 percent, down from 6.2 percent the month before. Almost 350,000 Czechs are out of work. The fall in the unemployment rate has been ascribed to both seasonal factors and high demand for labour.

Cabinet to discuss investment in science

The Czech Republic invests only 1.42 percent of its gross domestic product in science, according to a new report by the OECD quoted in Hospodarske noviny. That is half the amount invested by states such as Finland, the USA and Japan. With the cabinet due to discuss the report this month, Czech Prime Minister Mirek Topolanek said the government wanted the country to be among the world's best in this area in the future.

European Commission: Czech Republic becoming less competitive

Photo: European Commission
The Czech Republic is becoming less competitive, suggests a new European Commission report, echoing a recent study by the International Monetary Fund. The EC cites as the reasons for the decline in competitiveness the low efficiency of state officials, a poorly functioning labour market, corruption and tax regulation.

Cabinet takes first step towards sale of Prague Airport

Ruzyne airport
The first step towards the sell-off of Prague's Ruzyne airport was taken this week, when the cabinet voted to transform it from a national enterprise into a joint-stock company. The ministers of finance and transport now have until March next year to put various options on privatising the airport before the government. Transport Minister Ales Rebicek told Hospodarske noviny that several of his counterparts from other EU states had already expressed interest in the sell-off, though no negotiations had yet taken place.