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In Business News this week: Russia sanctions to cost Czech exporters 19 billion; employers block higher minimum salary; average monthly salary growth slows down in Q2; Czech Railways post profit in H1, and Czech shoe exports reach record numbers in 2013.
Czech exporters to lose 19 billion on Russia sanctions
Sanctions between Russia and the EU, as well as increased tensions between Moscow and the West over Ukraine are likely to cost Czech exporters some 19 billion crowns over the next 12 months, according to the state-owned exports insurer EGAP. Czech exports to Ukraine have also been hit by the crisis, having dropped by 10 billion crowns since February. Last year, Czech exports to Russia amounted to 116 billion crowns while exports to Ukraine reached 32 billion.
Employers block higher minimum salary raise
Czech employers have blocked proposals by the government and trade unions to increase the minimum monthly salary by 700 crowns to 9,200 crowns. In June, government officials, trade union leaders and employers’ representatives agreed to raise the minimum salary by 500 crowns beginning next January but Prime Minister Bohuslav Sobotka said a further increase would present no major problem. However, the employers argue the raise would put recovering Czech firms under further pressure. Mr Sobotka nevertheless said his government will make a decision on the minimum salary next week. Around 100,000 Czech workers are paid the minimum salary of 8,500 crowns; it was last increased last August when it went up by 500 crowns.
Growth of real average monthly salary slows down in Q2
Real average monthly salaries rose by an annual 2.1 percent to 25,500 crowns in the second quarter of this year, according to figures released this week by the Czech Statistics Office. The nominal increase reached 2.3 percent. The increase was slower compared to the previous quarter when real salaries grew by 3.1 percent; analysts say however the growth rate in the first quarter was boosted by firms paying out extra bonuses. The median salary in the second quarter was 21.385 crowns.
Czech Railways post net profit of 158 million in H1
State-owned train operator Czech Railways registered a net profit of 158 million crowns in the first six months of the year. In the same period last year, the firm recorded a loss of 510 million. Czech Railways’ cargo division made a profit of 540 million between January and July, up by 300 million from the first six months of 2013. Its passenger business incurred a loss of 262 million in the first half of this year, down from 644 million last year. The head of the company’s board of directors, Daniel Kurucz, said higher revenues from passenger transportation as well as cost-cutting were behind Czech Railway’s improved results.
Czech shoes exports reached record numbers in 2013
Some 64 million pairs of shoes were exported from the Czech Republic last year, which was twice as much as in the previous year and the highest number on record, according to figures released by the Czech Footwear and Leather Association. Meanwhile, some 104 million pairs of shoes were imported to the Czech Republic in 2013, mainly from China and other Asian countries. A vast majority of Czech shoe exports however come from Czech-based foreign producers as only about 4 million pairs of shoes were made by Czech firms, according to the Association.