Czech unemployment rate falls below 10 per cent

Czech unemployment rate (April 2002 - April 2003), source: CTK

The Czech unemployment rate has fallen below ten per cent for the first time this year, but analysts predict that such good news is unlikely to continue. In the coming months unemployment is expected to rise again, and the huge difference between the jobless rates in the more and less prosperous parts of the Czech Republic remains a problem.

Czech unemployment rate  (April 2002 - April 2003),  source: CTK
Figures released on Monday show that the Czech unemployment rate has fallen below ten per cent for the first time since last December. The unemployment rate for April was 9.6 per cent, down 0.4 per cent from the rate in March. The number of unemployed Czech citizens is just over 509,000, or 19,000 less than the previous month.

Although the drop in unemployment is of course very welcome, some analysts say that it is only temporary. I spoke to Tomas Spiroch, the director of the labour market section at the Ministry of Labour and Social Affairs, and asked him if he believed that the unemployment rate would continue to fall in the coming months:

"We expect the seasonal improvement to continue into the next month, so that the unemployment rate will fall further. Nevertheless, this trend will be reversed when new graduates hit the labour market, and the jobless rate will increase again in the summer. If we look at previous years, the unemployment rate usually grows steeply in July - and this year should be no exception - as some employers lay off workers at this time of year, promising to hire them again at the end of the summer holidays."

To be sure, the picture looks positive for some places in the Czech Republic: Prague, Benesov, Pelhrimov, Ceske Budejovice and Mlada Boleslav all record jobless rates below five per cent, with the lowest rate in the whole country being 2.8 per cent in western Prague.

But the situation in other areas, especially in Moravia and northwestern Bohemia, is much more gloomy. The town of Karvina, in the region of Moravia-Silesia, and the northwestern Bohemian town of Most both register jobless rates above twenty per cent, with Most having the country's worst rate at 21.8 per cent.

Another town in northwestern Bohemia, Louny, also has a high unemployment rate of 17.4 per cent, which translates into 7,500 people out of work. I asked the head of the labour office in Louny, Petr Zahorik, what was being done there to provide more jobs for citizens:

"In the past, the district of Louny used to be an agricultural area without any industry. Now there are about ten plants being constructed by foreign investors."

So you expect the employment situation to improve with the construction of these plants?

"We expect about three thousand places of work to be created by the end of 2005."