In Business: Czech financial institutions revise down their economic growth forecasts for this year, the government favours nuclear and coal power in its long-term energy plan, the forex interventions launched by the Czech National Bank last year have attracted more foreign visitors to the Czech Republic and the largest Czech hotel – Hilton Prague - has been put up for sale.
The forex interventions launched by the Czech National Bank last year, in order to weaken the crown, have brought a higher number of tourists to the Czech Republic. In the first two quarters of 2014 the number of tourists from neighbouring countries rose on average from 6 to 10 percent, with the highest number of visitors from Austria and Slovakia. However the interventions negatively affected the profit margins of travel agencies.
A third of ski hills in the Czech Republic will modestly boost prices this winter season, news website iDnes reported on Tuesday, citing the Association of Czech Ski Resorts (AHS). The price will go up on average by 11 crowns for a children’s daily ski pass, the highest increase. Ski hills have invested hundreds of millions of crowns in snow making equipment as well as to broaden existing runs. Above all, operators will be hoping for decent conditions and not a mild winter like the season last.
The European Commission has released its economic growth forecast for the Czech Republic which predicts a growth of 2.5 percent for 2014 and 2.7 percent for the next two years. The deficit in public financing is expected to stay well below the recommended 3 percent of GDP. In 2014 the Commission predicts a gap in spending of 1.4 percent of the GDP, 2.1 percent next year and 1.7 percent in 2016. The forecast is slightly more optimistic than the one released by the Czech Finance Ministry which recently reviewed its economic growth forecast for this year down from 2.7 to 2.4 percent of the GDP. Its growth forecast for the next two years is 2.5 percent.
The Czech power company ČEZ has said it will temporarily halt operations at its coal burning plant in Bulgaria as of the beginning of next year after it emerged that a planned investment to bring the plant up to EU environmental rules would not be economically justifiable given the cost of electricity.
Nine months after its appointment, the Czech government is stable and can rely on sufficient support in Parliament, Prime Minister Bohuslav Sobotka said in a statement marking a year since a snap general election. The government’s stability allows it to undertake unpopular measures including labour market and education reforms, the prime minister said. The government has successfully launched a public administration reform but should improve tax collecting and curb crime, according to Mr Sobotka.
In Business News: Czech Airlines gets a firm commitment for financial support from Korean Air and pushes ahead with restructuring plan, the ruling parties agree on the introduction of kurzarbeit to cushion the impact of the EU-Russia sanctions and give their approval to a finance ministry proposal to level a punitive tax on undeclared property, and, the average interest rate on mortgage loans drops to its lowest level since 2003.
The Czech Finance Ministry has lowered its forecast for this year’s GDP growth to 2.4 percent, down from its previous estimate of 2.7 percent. The ministry said is cut the forecast due to revisions of the country’s economic growth in the previous quarters as calculated according to a new European methodology, known as ESA 2010. In the next two years, the ministry expects the economy to grow by 2.5 percent, mainly because of growing domestic consumption.
The Senate on Thursday approved a government-proposed bill on the introduction of a third 10 percent VAT rate on books, baby food and medicines as of January 2015. The basic VAT rate of 21 percent and the reduced rate of 15 percent will be maintained. The bill still needs to be signed into law by the president.
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