Business News

In Business News: the public finance gap will again exceed euro adoption criteria next year - the outgoing finance minister says that will not impact plans to adopt the currency in 2010; leasing offices and commercial spaces is more profitable in Prague than almost every other capital in Europe; the Czech crown reaches an all-time high against the dollar; and the country is experiencing a boom in the construction of wind power stations.

Public finance gap no threat to euro adoption, says Sobotka

Finance Minister Bohuslav Sobotka

The Czech Republic's public finance gap will next year exceed the 3.3 percent limit the country has pledged to meet in order to qualify for adoption of the euro. The state budget for next year has been drafted with an 88 billion CZK deficit (over 4 billion USD), with the public finance gap set to reach up to 3.8 percent of GDP. The Finance Ministry puts the public finance gap at 3.6 percent of GDP this year. But outgoing finance minister Bohuslav Sobotka says this failure to meet convergence programme criteria does not pose a threat to adoption of the euro. He said that would happen in 2010, as planned.

Prague leases among most profitable in Europe

Leasing offices and commercial spaces is more profitable in Prague than almost every other capital in Europe; such properties bring in over six percent a year in Prague - a figure bettered by only Moscow and Lisbon, according to a report by international property company Knight Frank quoted in Lidove noviny. However, profits aren't what they used to be - during a boom period a decade ago profits reached 16 percent in Prague.

Crown sets new record against dollar

After last week setting a new record against the euro, the Czech crown reached an all-time high of 21.72 to the dollar on Thursday, as the US currency fell on global markets.

Retail sales in June confirm fast growth this year

Retail sales in the Czech Republic grew 8.3 percent year-on-year in June, continuing this year's fast growth. As in previous months, sales of items other than food contributed most to the increase, and sales grew fastest at outlets selling clothes and footwear.

Boom in wind power station construction

The country is currently experiencing a boom in the construction of wind-powered current-generating plants, after the introduction of a new law last year guaranteeing operators fixed prices for the next 15 years. There are currently 49 wind power stations in the Czech Republic. But 50 to 80 more could be built in the next year, David Jozefy, a member of the board of the Czech Wind Energy Society, told Hospodarske noviny.

CEZ representative warns of power shortages

Alan Svoboda, photo: CTK

Those wind-powered stations could well be necessary: a representative of power producer CEZ said this week that both the Czech Republic and Slovakia could face power shortages in just three years' time. CEZ's Alan Svoboda said that would lead to more imports and higher wholesale prices. He said, therefore, that it was necessary to start constructing new resources - and quickly.

Lock maker FAB increases profits

The country's largest lock producer FAB increased its profits by a quarter last year to almost 100 million CZK (over 4.5 million USD). FAB, which is owned by a Swedish company, supplies its products to car makers Skoda Auto, Volkswagen and Ford. FAB padlocks are also to be seen everywhere in the Czech Republic.