Minutes from the Czech National Bank board meeting of June 27 – when
policymakers raised the main interest rate by a quarter point to 1 per cent
– show growing concern over inflationary pressures stemming from the
tightening labour market and corresponding high wage growth.
The jobless rate dropped to 2.9 per cent in June, the lowest in the EU. In the first quarter of 2018, Czech average wages rose by 8.6 per cent, also outpacing the EU average.
The Czech annual inflation rate rose to an eight-month high of 2.6 per cent in June from 2.2 per cent in May, widening the gap between the rate and the central bank’s 2 per cent target.
Rising foreign producer prices, including commodities, pose an inflationary risk in the short term while global uncertainty associated with the impact of Brexit could have an anti-inflationary effect in the longer run, the CNB said.
Unemployment in the Czech Republic fell to 2.9 percent in June, down from
3.0 percent the previous month, according to official figures released on
Wednesday. In June last year the jobless rate stood at 4.0 percent.
The number of jobless last month was the lowest since July 1997, while number of vacant posts climbed last month to over 301,500.
Trade union leaders have failed to reach agreement with government
representatives on wage increases in the public sector. A deal concerning a
pay rise of public sector employees should be reached by mid-August, the
head of the congress of trade unions, Josef Středula, said after the
meeting on Monday.
Unions are demanding a 15 per cent pay rise for teachers and a 10 per cent salary hike for other public sector staff, including fire-fighters and policemen, starting this October.
Czech restaurant and hotel owners are struggling with a major shortage of skilled workers, the daily Hospodářské noviny reported on Wednesday. With the tight labour market and growing number of new restaurants, both finding and keeping employees has become increasingly more complicated and some businesses have even been forced to close down.
In response to numerous complaints with regard to abuse of the Czech visa system in Ukraine, the Czech consulate in Lvov has moved to simplify and speed up the process. Steps have been taken to root out corruption by local middlemen who blocked the registration system, making it virtually impossible for anyone else to sign up for months. Applicants will now be able to book by phone, eliminating the long waiting lines outside the consulate and the waiting time for a visa should be reduced from 130 days to 75.
Unemployment in the Czech Republic hit a new low in May, dropping to 3
percent from 3.2 in April, the main Labour Office reported on Friday.
The year-on-year decline is even steeper, down from 4.1 percent. At the end of the month labour offices reported 230,000 unemployed, the lowest number since June 1997.
The unemployment rate has been dropping steadily since February and labour market experts say the trend is likely to continue.