The European Commission has revised downward its forecast for the growth of
the Czech economy this year and in 2018. According to its latest prognosis,
Czech gross domestic product should expand by 3.0 percent this year and 2.9
percent next year. An earlier forecast had suggested growth of 3.4 percent
in 2018 and 3.1 percent in 2019.
The European Commission also issued less positive growth predictions for the Eurozone and the European Union as a whole on Thursday.
Consumer prices in June rose 2.6% year on year, driven by higher costs for
fuel, electricity, and household rent, the Czech Statistical Office said on
Wednesday. Prices for telecommunications, clothing and heating fell in
annual terms. Inflation has accelerated for a third consecutive month,
following a growth rate of 2.2% y/y in May.
Some analysts predict the Czech National Bank will again intervene to stem inflation by increasing key interest rates. On 27 June, the central bank raised rates for a fourth time in just under a year, setting the two-week repo rate a 1% from 0.75%.
The country’s economy continues to accelerate and record-low unemployment is pushing up wages. Another unexpectedly strong inflationary factor has been the weakening of the crown against major world currencies. The crown is now at its lowest level against the euro in nearly a year, at CZK 25.9/EUR.
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.
Czechs are the biggest opponents of the euro in the European Union,
suggests the latest Eurobarometer survey, quoted by Czech Television. Some
73 percent of Czech respondents in the poll said they were against the
common European currency.
In 2005, a year after the Czech Republic joined the EU, some 63 percent of Czechs were in favour of the euro. Last year, the most recent date for which figures are available, that had fallen to 22 percent.
A co-author of the Czech Insolvency Act of 2006 has warned that a proposed amendment to the law would “unintentionally” give debt relief to hundreds of thousands of people. Tomáš Richter, a renowned expert on both Czech and European insolvency law, said in an interview that lax rules set out in the current amendment could potentially mean adding another 600,000-700,000 to the list of people qualifying for debt relief.
The newly-appointed agriculture minister, Miroslav Toman, has said he will move to regulate the number of promotional campaigns in supermarket chains. The announcement comes in the wake of a controversial promo campaign at the German retailer Kaufland which recently offered shoppers a liter of milk for the price of just 1 crown.