07-12-2012

In Business News this week: Czech real wages continue to fall; few Czechs plan to join a new pension system; Qatar Airways and Korean Air are interested in acquiring Czech Airlines; apartment prices expected to decrease next year; Czech spas going through hard times, and Czech architects win competition to build monument to victims of slavery in Senegal.

Czech real wages continue to drop in Q3

Photo: archive of ČRo 7 - Radio PraguePhoto: archive of ČRo 7 - Radio Prague The average monthly wage in the Czech Republic increased in the third quarter of this year by some 350 crowns to just over CZK 24,500 or more than USD 1,250, according to figures released this week by the Czech Statistical Office. That represents a 1.4 percent increase, the lowest quarterly rise since 2000. After taking inflation into account, real wages decreased by 1.8 percent. Wages in the private sector only rose by 1.3 percent between July and September, 1 percent less than in the previous quarter. In the public sector, wages grew by 2.3 percent. This development further weakens domestic demand, which is considered a major factor behind the recession of the Czech economy.

Poll finds low interest in new pension system

Photo: Sebastian Schaeffer, stock.XCHNGPhoto: Sebastian Schaeffer, stock.XCHNG The Czech government has pushed through an overhaul of the Czech pension system which comes into force next month. The reform offers people a chance to divert part of their retirement insurance to individual accounts run by private pension funds. But a survey by the AWD consultancy released this week shows that only about two percent of those eligible are interested in joining the new system, while another four percent said they were likely to join. In contrast, more than 75 percent of people who participated in the survey said they were not interested, with some 18 percent of respondents undecided.

Qatar Airways, Korean Air eye Czech Airlines purchase

Photo: Tomáš AdamecPhoto: Tomáš Adamec Only two out of 50 airlines approached by Czech Aeroholding, the mother company of Czech Airlines, or ČSA, have expressed interest in purchasing the troubled national carrier, Prime Minister Petr Nečas said on Wednesday. These are Qatar Airways and Korean Air. The Czech government is looking to sell a 96-percent-stake in the firm to a European carrier; only a minority stake has been put up for sale for those outside Europe. Binding bids should be submitted in February and the Czech government is scheduled to make a decision on the sale in April or March.

Czech Airlines last year posted a net loss of CZK 241 million, or nearly USD 12.4 million. However, the company’s balance was improved by massive property sales, while Czech Airlines profits dropped by some 20 percent.

Central bank: apartment prices to continue to decline in 2013

Photo: Jiří NěmecPhoto: Jiří Němec The Czech National Bank expects apartment prices to continue to decline next year, board member Eva Zamrazilová told a conference in Brno this week. Decreasing real wages along with weakening economic activity are seen as factors that will continue to push prices down in 2013. A slight increase is expected only in the prices of building lots. The Czech Statistical Office registered a 0.4 percent rise in apartment asking prices in Prague in the third quarter of this year but Ms Zamrazilová said this was a statistical anomaly. Reality Mix, a real-estate website, says prices of apartments in Prague dropped in November by 1.4 percent compared to the previous month. The average price of one square meter in the capital was given as just over CZK 52,000, or some USD 2,700.

Czech spas in “deepest crises” since 1990s

Photo: CzechTourismPhoto: CzechTourism Czech spas are going through a deep crisis, with fewer Czech and foreign patients, lower payments from insurance companies and more government restrictions of diagnoses covered by health insurance, the daily Hospodářské noviny reported on Wednesday. Spas have seen a 25-percent drop in demand this year, and expect that Czech health insurers will cut their payments by one third. Some spas react by closing down their facilities for the winter season, others lay off staff. The head of the Czech Spa Association told the paper the situation was the gravest since the privatization of the 1990s.

Czech studio wins competition for memorial to slavery victims in Dakar

Photo: HelikaPhoto: Helika The Prague-based architectural studio Helika won a competition for the design of a monument to the victims of slavery in the Senegalese capital of Dakar, the weekly Ekonom reported. The winning design, entitled Mémorial de Gorée, represents a ship that should be placed on a coastal cliff near the city. The memorial, whose costs are estimated at some EUR 13 million, should be completed by the year 2015.

07-12-2012