The possible introduction of a sector tax on banks in the Czech Republic would lead to a knock-on increase in the cost of financial products, according to an analysis conducted by the Centre for Economic and Market Analyses (CETA) published on Tuesday. This would mainly concern higher mortgage rates and more expensive loans for entrepreneurs, the study found.
The Czech Republic’s total debt amounted to CZK 2.34 trillion at the end
of the first quarter of 2019, up by CZK 161.5 billion in annual terms,
according to the Czech Credit Bureau (CRIF) database.
The volume of non-performing debt fell by CZK 4.1 billion to CZK 32.4 billion. The number of people who had problems making consumer debt payments fell 17 percent year on year. The number of people who failed to pay their housing loans fell by 16 percent.
The average amount of short-term debt “at risk” stood at almost CZK 98,000 at the end of the first quarter of 2019. This concerns debts in which three consecutive monthly instalments were not paid or were declared due by the creditor.
Czech state-controlled power utility ČEZ reportedly plans to sell its
assets in Romania and Turkey, in addition to a previously reported plans to
divest from Bulgaria.
ČEZ chief Daniel Beneš said in an interview with the business daily Hospodářské noviny that the group is also considering selling some assets in Poland. In total, the Prague-listed company hopes to get tens of billions of crowns from the sales.
Shareholders in ČEZ, which is 70 percent owned by the state, would vote on the new strategy at the annual general meeting on June 26, he told the daily.
Proceeds would be used to construct renewable energy assets and new nuclear units as well as to the modernize ČEZ’s distribution network, he said.
High energy expenditures are forcing nearly a quarter of Czechs to cut back on other types of spending, a recent survey conducted by the polling agency STEM revealed. However, other data shows that 68 percent of the population likes to rank up their heating to temperatures by up to 25 degrees, resulting in unnecessary costs.
A Finance Ministry proposal for next year’s budget, which is to be
debated by the government next week, sets next year’s deficit at 40
billion crowns, Prime Minister Andrej Babiš announced at a press
conference on Monday.
The draft budget forecasts state expenditures of 1.59 trillion crowns and revenues at 1.55 trillion crowns. According to Mr Babiš, the budget plan also envisages a hike in public sector wages and higher pensions. The first draft budget proposal is to be presented to the lower house on May 31.
The Czech Republic’s system of company tax is one of the most complicated in the EU, claims a study made in collaboration by the consultancy BDO and two German universities. The Czech Republic ranked fourth from bottom among EU states and its tax system was considered below average in the world-wide ranking.
The Czech government expects economic growth to be driven mainly by rising
household demand in 2020. According to the draft Convergence Programme
submitted to the European Commission, Czech GDP should grow 2.4 percent
next year, down from nearly 3 percent growth in 2018.
According to projections released earlier in May by the Czech National Bank, however, the economy should grow by 2.5 percent in 2019 and 2.8 percent in 2020.
Analysts warn the risks are skewed in the direction of weaker growth, mainly due to slowing industrial production and external demand.
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