Business News

Round-up of business news this week: The government approved the draft budget for 2017; Foreign debt rose to over 3.350 trillion crowns in second quarter; Škoda Transportation completed the first part of a major German contract; Bělobrádek apologised for VAT confusion; top brewer says it will raise prices.

Government agrees on draft state budget for 2017

Photo: Barbora Kmentová

The government approved a draft state budget for 2017 with a deficit of 60 billion crowns this week. The decision was tweeted by Prime Minister Bohuslav Sobotka on Wednesday. The draft is counting on wage increases for teachers and healthcare workers as well as increases in old age pensions. The state is also counting on an increase in revenues from health insurers. Among those seeing wage rises are other public sector employees, firefighters, the police, and in all likelihood, soldiers.

Foreign debt rises to over 3.350 trillion crowns in second quarter

The Czech Republic’s foreign debt increased by 133 billion crowns in the second quarter of this year to reach 3.353 trillion crowns, according to figures just released by the Czech National Bank. The country’s foreign debt is equivalent to 72 percent of its gross domestic product. The Czech Republic’s foreign debt exceeded the 3 trillion mark for the first time last year. It crossed the 2 trillion crown line in 2010, six years after reaching 1 trillion for the first time.

Škoda Transportation completes first part of major German contract

Photo: Škoda Transportation

The Czech company Škoda Transportation has completed its first train as part of an order for Germany’s Deutsche Bahn, iDnes.cz reported on Monday. The order is seen as a major breakthrough for Škoda Transportation. However, production delays mean that the company will not be presenting the new train at next week’s Innotrans railway trade fair, the news website said. Under the 2.6 billion crown deal, the Czech firm is supplying Deutsche Bahn with six six-wagon, bi-level trains including locomotives.

Bělobrádek apologises for VAT confusion

Deputy Prime Minister Pavel Bělobrádek apologised this week for creating apparent confusion by maintaining that leaders of the ruling coalition of the Social Democrats, ANO, and his own party, the Christian Democrats, had agreed on the lowering of VAT on draught beer and basic foodstuffs. He corrected information made public by saying that the matter in fact had not yet been approved. The idea being floated is that the VAT on beer on tap and basic food items could be lowered from 21 to 15 percent next year, and dropped to ten the year after. Fellow party leaders Prime Minister Bohuslav Sobotka and ANO’s Andrej Babiš said they were not aware of any agreement after details were released by Agriculture Minister Marian Jurečka, a member of the Christian Democrats.

Brewer Plzeňský Prazdroj to raise prices from next month

Photo: Dominika Nováková

One of the Czech Republic’s leading breweries, Plzeňský Prazdroj, is set to raise its prices by an average of 3.2 percent from the start of October. It will cost pubs and restaurants an extra 60 hellers a half-litre for the 10-degree lager Gambrinus and one crown more a half-litre of the 12-degree Pilsner Urquell. The brewer said it was raising its prices to cover more expensive raw materials, in particular hops, and investment in modernizing and expanding its sales.