Politics & Economics

Czech Pensions to Increase by 360 CZK per Month

Czech old-age, disabled, widow’s, widower’s, and orphan pensions will increase by 360 crowns a month for all from January, under a government regulation on regular indexation. The average old-age monthly pension should be above 20,600 crowns in January, the Labour and Social Affairs Ministry stated previously. More than 700 billion crowns are expected to flow from the budget to all pensions in 2024. More than 2.8 million people receive old-age, disability, or survivors’ pensions from the state. Under the law, pensions are regularly indexed in January. So far, they have been increased by price rises and by half the increase in real wages. As real wages have not risen, the January increase reflects only price rises. According to the price increase, which was 1.3 percent, the average old-age pension should grow by 264 crowns. However, all pensioners will receive about 100 crowns more. According to the ministry, the solidarity part of pensions must correspond to one-tenth of the average monthly wage, which is expected to be almost 44,000 next year. The fixed part of the pension must thus go from 4,040 to 4,400 crowns. It must therefore rise by 360 crowns. From January, special pension contributions for World War Two freedom...

by Prague Morning Jan 01, 2024

President Pavel Calls for “Strength and Unity” and “Concrete Steps Towards Euro Adoption”

In his New Year address to the nation, President Petr Pavel underlined the need for strength and unity, saying it had been a difficult year from which he hoped to see the nation emerge stronger. Looking back on the past year, Mr. Pavel said he appreciated the government’s unity in undertaking unpopular measures to tackle the country’s debt, but criticized it for poor communication towards the public, which he said opened the door to populism. “We expect lower inflation, real wage growth for the first time in several years, and modest economic growth. I hope it will mark a turn for the better and give us all reason for greater optimism in the years to come,” the president concluded. President Pavel also devoted time to the 20th and 25th anniversaries of the country’s membership in the European Union and NATO, stressing their importance for the country’s security and economic development. The President emphasizes the need to take tangible actions to fulfill the commitment to adopt the euro. Despite the ongoing debates about the pros and cons of the euro for a country with an open and export-oriented economy, the common currency is deemed the logical future, notes the President. Last...

by Prague Morning Jan 01, 2024

Ukrainians in Czechia Could Help in Short-Staffed Health and Social Services

Ukrainian refugees who could work in the health sector and social services, two sectors facing long-standing labour shortage issues, are being sought out by the Czech Labour Ministry, Labour Minister Marian Jurečka (KDU-ČSL) said on Thursday. Jurečka (KDU-ČSL) assessed the success of refugee integration in the country at a press conference following this week’s government meeting, Czech News Agency reported. He said the Czech Republic is “the most successful country” in integrating newcomers, noting that of the 373,000 Ukrainian refugees (including children and pensioners) the Czech Republic has taken in, 123,000 people on protection visas are now employed. “Social services, like other fields, are in a situation where there is a lack of human resources… We are working on one of the possible solutions and trying to target and reach out to people from among Ukrainian refugees who could work in health and social services. We see this as the biggest reservoir of people today who could fill the gaps quite quickly,” Jurečka said. “Of course, we are also faced with the problem of education, or the question of its recognition, as well as the language barrier. We are also trying to work on this,” he added. According to the...

by Prague Morning Dec 29, 2023

Prague Residents Will Pay More for Water Next Year

In the upcoming year, Prague’s residents are set to experience a rise in their water bills. The water and sewage fees will increase to 144.88 crowns per cubic meter, marking a 13 percent upturn from the previous year. City councilors, in February 2022, approved a strategy extending until 2028, enabling the city to annually increase water and sewage fees by two percent above inflation. Consequently, this year witnessed a 13 percent escalation, with the amount climbing by nearly 17 crowns, from 128.18 crowns to 144.88 crowns per cubic meter. The municipal company Pražská vodohospodářská společnost (PVS) oversees Prague’s water management infrastructure, leasing it to Pražské vodovody a kanalizace (PVK) until 2028. Next year, PVS is set to collect approximately 3.55 billion crowns in rent, an increase of about 584 million from the previous year. The year-on-year increase translates to around 56 crowns per month per person for all water management services, totaling an annual increase of 671 crowns per person. According to the document approved by Prague councillors on Monday, the socially sustainable water price calculated for the city of Prague in 2024 is 235.47 crowns per cubic meter. Despite the increase, the price of water and sewage in Prague...

by Hena Takal Dec 21, 2023

Trust in Zelensky Plummets Among Czechs, Čaputová Most Trusted Foreign Politician

A recent survey by CVVM reveals a significant decline in trust in Ukrainian President Volodymyr Zelensky among Czech citizens. The survey, conducted from late September to early December, indicates that Zelensky’s trust rating has dropped by 21 percentage points with 28 percent expressing trust and 62 percent expressing distrust. This substantial decrease is the most significant among all foreign politicians included in the survey. In contrast, Slovak President Zuzana Čaputová is the most trusted foreign politician among Czechs, with a 52 percent trust rating and 35 percent expressing distrust. However, her image has seen a 17 percent increase in distrust compared to the previous survey in spring 2022. Russian President Vladimir Putin remains the least trusted foreign politician with only 12 percent expressing trust and a staggering 82 percent expressing distrust. While Putin’s ratings have remained relatively stable since the previous survey, the decline in trust for Zelensky stands out. The survey also notes less dramatic but noticeable shifts towards a worsening evaluation for French President Emmanuel Macron and U.S. President Joe Biden compared to Zelensky. Biden and Zelensky share the third position in terms of distrust with Belarusian leader Alexander Lukashenko leading the distrust ratings at 75 percent, followed...

by Prague Morning Dec 20, 2023

Czech Republic Leads EU with Highest Inflation in November

Czechia has the highest inflation rate in the entire European Union according to the latest report from the EU’s statistical office Eurostat. Prices in the Czech Republic climbed by 8 percent year-on-year, while the average EU inflation rate fell by 0.5 percent in November to 3.1 percent, the lowest it has been in around two years. In the Eurozone countries, inflation fell by 0.5 percent in November to 2.4 percent. However, the Czech Republic stands out with the highest inflation rate in the EU, witnessing an 8 percent year-on-year surge. In contrast, Belgium is already grappling with deflation, experiencing a 0.8 percent decrease in prices year-on-year. Within the euro area countries, November also witnessed a 2.4 percent inflation rate, confirming Eurostat’s initial estimate. Notably, EU-wide inflation is not factored into this estimate. Comparatively, a year ago, the inflation rate in the euro area was 10.1 percent, rising to 11.1 percent across the entire Union. The Czech Republic’s inflation surpasses that of other countries, such as Hungary, which historically held the highest inflation in the EU. Hungary now records a 7.7 percent inflation rate. In Poland, the inflation rate remained stable at 6.3 percent in October, while Slovakia experienced a decrease to 6.9 percent. In...

by Jakub Dvorský Dec 19, 2023

EU Agrees To Open Membership Negotiations With Ukraine And Moldova

The European Union decided Thursday to open accession negotiations with Ukraine, a momentous moment and stunning reversal for a country at war that had struggled to find the backing for its membership aspirations and long faced obstinate opposition from Hungarian Prime Minister Viktor Orban. European Council President Charles Michel, who was chairing a Brussels summit of the EU’s 27 leaders where the decision was made, called it “a clear signal of hope for their people and our continent.” Although the process between opening negotiations and Ukraine finally becoming a member could take many years, Ukrainian President Volodymyr Zelenskyy welcomed the agreement as “a victory for Ukraine. A victory for all of Europe.” “History is made by those who don’t get tired of fighting for freedom,” Zelenskyy said. Belgian Prime Minister Alexander De Croo said it also was a black eye for Russian President Vladimir Putin: “It is a very clear message to Moscow. Us Europeans, we don’t let go of Ukraine,” he said. Orban said his opposition remained steadfast, but, with a unanimous decision required, he decided to let his right to oppose lapse because the 26 others were arguing so strongly in favor. Under EU rules, an abstention does not prevent...

by Prague Morning Dec 14, 2023

Czech Government Approves CZK 1,600 Increase in Minimum Wage

The Czech government approved a 1,600 crown or 9.2% increase in the monthly gross minimum wage to 18,900 crowns from January, Labour and Social Affairs Minister Marian Jurecka said on Wednesday. The increase is aimed to partially catch up with inflation which soared over the past two years. The extent of wage growth at a time of economic contraction and low unemployment has been a key factor for the central bank in its monetary policy deliberations. The minimum wage is only earned by about 118,000 Czechs among the roughly 5.2 million working population, but it serves as a benchmark for guaranteed wages in some professions, and a general indicator. Unions had demanded a 2,200 crown increase while employers had said a 1,000 rise was acceptable. Experts: minimum gross decent wage should be CZK 40,912 The minimum gross decent wage for a full-time job in Czechia that would cover the needs of an adult with a child, as well as leisure time and small savings, should be CZK 40,912. I n Prague, it should be CZK 42,776 due to the higher cost of living. The estimate was presented by a team of experts from the independent and informal Platform for a...

by Prague Morning Dec 13, 2023

Pražská Teplárenská to Increase Heating Prices by Six Percent

Customers of Pražská Teplárenská, a heating company controlled by the Veolia group, have recently received letters indicating that heating prices will increase by six percent in the new year. According to the company, they strive to keep heating prices at a lower level; however, they must consider the development of fuel costs, emission permit prices, increasing operating and maintenance costs, and the high inflation rate. One reader, surprised by the justification, pointed out that this year, the price of gas, which Pražská Teplárenská uses during peak times, has significantly decreased. He complained that over the past two years, the cost of heating in Prague has risen by half. Pavel Maďar from Pražská Teplárenská told Novinky that the production of heat for Prague depends only slightly on gas, accounting for about 2.5 percent of total supplies. The reduction in the price of gas has only a partial impact on the overall price formation of Pražská Teplárenská, which was reflected in a slight decrease in the variable component of the price for 2024. However, a significant increase in other costs has led to an average price increase of six percent. In contrast, the company Teplo pro Prahu will maintain this year’s price...

by Prague Morning Dec 13, 2023

Czech Jobless Rate Stable At 3.5% in November, Same as in Previous Month

The Czech Republic’s unemployment rate held steady in November, figures from the labor office showed Friday. The unemployment rate came in at 3.5 percent in November, the same as in the previous month. Meanwhile, economists had expected the rate to rise to 3.6 percent. In the corresponding month last year, the jobless rate was also 3.5 percent. There were 263,226 unemployed people in November, up from 260,641 a month ago. The labor office reported that by the end of November, job offices had registered a total of 278,708 vacancies, indicating 1,788 less vacancies than in the preceding month. Minimum wage to increase to CZK 18,900 The minimum wage is expected to increase by CZK 1,600 to CZK 18, 900 from January, Labour Minister Marian Jurečka said at a press conference last Wednesday. Within a few years, it should stabilize at 45 percent of the average wage. According to the minister, the minimum wage should start rising from 2025 according to a formula, which is to be regulated by the Labour Code. Four of the eight levels of guaranteed wages should also increase next year. The proposal will be discussed by the government next week.

by Richard Golbeck Dec 10, 2023

Drop in Czech Retail Sales Slowed Down to 1.4% in October

Czech retail sales decreased by 1.4% year on year and increased by 0.6% month on month in October, in the softest monthly drop in a year and a half. The drop in sales eased compared to the 4% y/y drop in September and the 2.8% y/y drop in August. “Compared to October 2022, sales of food and non-food goods decreased, whereas sales of automotive fuel increased,” commented Jana Gotvaldova of the Czech Statistical Office (CZSO). “All assortment types of stores except for those with cosmetic and toilet recorded a decrease in sales,” she added. Retail sales of clothing, footwear and leather goods in specialised stores decreased by 6.1% y/y, while sales of information and communication equipment decreased by 3.1%. Sales of other household equipment decreased by 2.9%, and food sales decreased by 2.4%. Sales of cosmetic and toilet articles increased by 5.9% y/y. Retail sales via internet and mail grew by 5.3%. Sales and repair of motor vehicles rose by 0.3% m/m and by 5.9% y/y. Analysts surveyed by the Czech Press Agency (CTK) say the dampened consumer situation in the country is slowly signalling an uptick, although an increase in retail sales is not expected until next year with lower inflation and growth of real...

by Prague Morning Dec 07, 2023

Czech Government Proposes Compensation Scheme for Home Office Workers

In a bid to adapt to the evolving work landscape, the Czech government has introduced a new initiative to compensate home office workers. Starting in January next year, employers are recommended to provide an additional CZK 4.50 per hour for remote work to cover associated expenses. This translates to an extra CZK 720 for a standard 160-hour work month, as stated by the Ministry of Labor and Social Affairs. The suggested amount reflects the potential costs incurred by employees while working from home, encompassing electricity and gas consumption, water fees, heating, and waste disposal. The calculation is based on the average hourly consumption of an adult in a typical household. The proposal, currently undergoing review, is not anticipated to undergo significant changes as it aligns with legal stipulations. The Ministry is in the process of determining the allowance in accordance with revisions to the labor code, which outlines the definition of these compensations. Importantly, these allowances are distinct from the salary and remain untaxed. While the suggested compensation is not obligatory, employers have the flexibility to offer a higher sum or choose not to provide any compensation at all. The exact amount is subject to negotiation between the employer and...

by Prague Morning Dec 05, 2023

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