Business briefs

In the business news this week: Czech foreign trade shows its first ever surplus, the Finance Ministry raises its GDP growth forecast as the crown hits a new high against the euro, the government promises almost 4 billion dollars in incentives and Plzensky Prazdroj records a significant increase in foreign sales.

Czech foreign trade shows first ever surplus

Photo: European Commission

The Czech Statistics Office announced on Friday that the country exported more goods than it imported for the first time in history last year. Foreign trade showed a surplus of nearly 42 billion crowns or almost 1.8 billion dollars in 2005, against a deficit of 26 billion a year earlier. The figures were largely due to car exports.

Trade and Industry Minister Milan Urban forecasts a surplus of 70 to 80 billion crowns this year. Economists said 2005's figures prove Czech exporters are successful in European Union markets despite the strengthening Czech currency. They expect Czech companies to enjoy similar success this year.

Ministry raises GDP growth forecast, crown hits new high against euro

The Ministry of Finance has raised its forecast for GDP growth this year to 4.6 percent, up from the previous estimate of 4.4. However, the ministry has warned of risks posed to the Czech economy from an over-strong crown; the Czech currency this week set a new record of 28.25 to the euro. As for inflation, the Finance Ministry says it expects it to reach 2.6 percent in 2006.

Daily: government promises almost 4 billion dollars in incentives

Photo: CTK

The government has promised investors incentives of over 90 billion crowns - almost 4 billion US dollars - in subsidies and tax relief since 2000, Mlada fronta Dnes reported this week. On top of that hundreds of millions of crowns have been invested by both state and local authorities in industrial zones. As for the 90 billion in promised incentives, only 2 percent has been drawn on - some 75 percent is made up of tax relief investors only receive years after starting operations.

The issue has been in the news after the Dutch firm LG Philips closed the doors on its TV screen factory in Moravia at the end of last week. State agency CzechInvest says if the company does pull out of the Czech Republic it will have to pay back the incentives it has received so far. Both the opposition Civic Democrats and the head of the Confederation of Industry have criticised the government's approach to incentives.

Plzensky Prazdroj records significant increase in foreign sales

Brewers Plzensky Prazdroj, makers of the famous Pilsner Urquell, say their export sales increased by 29 percent last year, to 2.2 million hectolitres. Its sales of 8 million hectolitres in the Czech Republic were similar to figures for 2004, the company's CEO, Mike Short, said this week.