Business News

Photo: European Commission

In Business News this week: the EC says it expects the Czech Republic's GDP growth to fall below 5 percent this year and also worsens the outlook for the country's public finance gap; March was the best month ever for the export of goods; unemployment falls below 7 percent; interesting figures have been released regarding the sectors in which Czechs work; and the agriculture minister wants to speed up the sale of state land to give Czech farmers an advantage before an EU accession transition period ends.

EC expects slowdown in Czech economy

The European Commission said this week that it expects the Czech economy to grow more slowly; after GDP growth rates of 6.1 percent in 2005 and 2006, the EC has forecast growth of 4.9 percent this year. It also worsened the outlook for the public finance gap, which it said should reach 3.9 percent of GDP in 2007, and fall just a little to 3.6 percent next year. The Czech Republic had pledged to reduce its deficit to 2.7 percent by 2008, in an effort to meet the criteria for adopting the euro.

Kalousek still setting 2012 as euro adoption target date

Photo: European Commission
Speaking in Brussels this week, the Czech finance minister, Miroslav Kalousek, admitted the country's failure to keep its promises on adoption criteria, blaming this on excessive spending by the previous government. But Mr Kalousek said the country was still aiming to stick to a revised date of 2012 for switching to the common European currency. The previous Czech government had set 2010 as a target date for adoption. The finance minister said the Czech lower house would debate a strategy paper on euro adoption in August.

March best month ever for export of goods

Photo: European Commission
But there has been some good news this week: Czech firms exported 213 billion CZK (over 10 billion USD) in goods in March, the most goods exported in one month ever. That had a significant impact on the country's foreign trade balance, which rose by 3.3 billion CZK year-on-year to 12.4 billion crowns. The record results have been attributed to strong engineering exports, a reduction in fuel imports, the strengthening of the crown against a weak US dollar and the mild winter.

Unemployment falls below 7 percent

Photo: European Commission
The relatively warm winter has also been given as one reason for a fall in unemployment. Last month 6.8 percent of Czechs were out of work, down from 7.3 percent in March. In April 2006 the jobless rate was 1.5 percent higher.

Czechs lead EU in terms of percentage employed in industry and construction

Some interesting figures have been released this week regarding what those IN jobs actually do. 40.2 percent of workers in the Czech Republic are employed in the industry and construction sectors, the highest percentage in the whole of the European Union. The share of workers in manufacturing in the third quarter of last year was 28.4 percent, which is also the highest in the EU. But fewer Czech workers are engaged in the services sector - 55.9 percent compared to the EU average of 67.7. By the way, this country also has an unusually high share of people with full-time jobs: only Slovakia and Hungary have higher figures.

Minister wants to sell off land fast to benefit Czechs before end of EU transition period

Photo: archive of Radio Prague
The minister of agriculture, Petr Gandalovic, wants to speeds up the sale of state land to farmers. The Czech Republic's Land Fund expects to sell off around 60,000 hectares this year, out of a total of 260,000 hectares. Mr Gandalovic would like to give Czech farmers the advantage of purchasing this land before 2011, when a transition period negotiated with the European Union comes to an end. A draft bill before the Chamber of Deputies would allow people from other EU states to buy Czech farm land, but Mr Gandalovic says he has persuaded the lower house's agricultural committee to take their time dealing with the matter.