Politics & Economics

Czech Inflation Rises Again Despite Government Measures

Inflation accelerated again in November and would have been at a new record high without government measures. Prices will rise further but the key question is the January number. “This is heading towards 19% in our estimates. Even so, this will not be a reason for the central bank to hike rates. However, the risk is a later rate cut than our forecast,” states ING. Inflation is back Consumer prices rose by 1.2% month-on-month in November, a re-acceleration from the 1.4% decline in October. Of course, in the previous month, the main reason for the fall in prices was the introduction of government measures against high energy prices. Thus, inflation has rather returned to the normal of recent months. Month-on-month growth was mainly driven by higher prices of housing, food and clothing. By contrast, the only item that fell in November, as we expected, was fuel. In year-on-year terms, consumer prices rose by 16.2% in November, which was 1.1pp higher than in October. The higher year-on-year figure is partly due to the comparative base from last year when VAT on energy prices was waived. In terms of year-on-year contributions to the CPI, only energy prices and transport prices showed a...

by Prague Morning Dec 12, 2022

Danuše Nerudova Leads In Presidential Election Polls For The First Time

Danuše Nerudova is the leading candidate for the Czech presidency for the first time, currently polling at 28%, ahead of Andrej Babis (26.5%) and Petr Pavel (23.5%), according to the latest poll from the Median agency released yesterday. It is an improvement of 13 percent from the October poll. Support for the other two leading candidates has increased over the past month as well, but not so markedly – opposition leader and former prime minister Babis (ANO) is polling 4.5% higher than in the previous poll, and retired general and former NATO and Czech military official Pavel is up 1%. In the previous Median poll, Pavel was the most popular. Both Nerudová and Pavel would beat Babiš if the two faced each other off in a second round of the elections. However, many voters remain undecided. “This is why it is not appropriate to clearly predict which of the candidates will eventually advance to the second round,” said the report from Median. Danuše Nerudová was born in Brno in 1979 into a family of computer technicians. She is the eldest of four siblings. Her expertise is in the field of international taxation and tax policy. She has contributed and led...

by Prague Morning Dec 10, 2022

“The Country is Not Ready for Euro Adoption,” Says Czech National Bank

The Czech Republic is not ready to meet the criteria for joining the Eurozone and the government should refrain from setting a date for adopting the euro, for now, a document presented by the finance ministry and the Czech National Bank says. The Czech Republic, one of the seven EU countries that do not use the common EU currency, committed to adopting the euro when it joined the bloc in 2004, though it is up to member states to decide on the date for introducing the euro. But “the Czech Republic is very unlikely to meet the benchmarks of any of the Maastricht criteria in 2023,” the document presented Wednesday writes. In November, Prime Minister Petr Fiala confirmed to journalists that “the country will not adopt the euro under his current government. For me, it is really a question of what is beneficial for the Czech Republic and Czech citizens. During the term of the government I have the honour to head, the adoption of the euro will not be a topical issue”. He added that experts also differed on the benefits of adopting the common European currency. Speaker of the TOP 09 and the lower house Pekarová Adamová said...

by Prague Morning Dec 07, 2022

Nerudova Gains on Pavel and Babis in Czech Presidential Race

Danuse Nerudova, the former Mendel University in Brno rector, is gaining on her rivals in the battle for the Czech presidency, according to a November poll conducted by the Ipsos agency. Andrej Babis, the populist billionaire and opposition leader, remains in the lead for the first round with 29.7%, followed by former general Petr Pavel with 25.3%, but Nerudova has climbed to 25%. This raises the possibility that Pavel could be knocked out of the run-off, or even that Babis could be eliminated and the second round could be between two centrist candidates backed by the governing coalition. Babis has widened the gap over Pavel when compared to the previous polls, but it is Nerudova who appears to be making the most significant gains. Pavel’s past in the pre-1989 communist military has been increasingly discussed in the media following historian Petr Blazek’s relentless efforts to depict Pavel as allegedly not disclosing all there is to say about his elite training in the final years of the communist regime, which the historian argues indicates that he was destined for a career as a spy. Pavel’s outstanding post-1989 career – which includes commanding posts in several missions abroad as well as serving as Czech army chief and...

by Prague Morning Dec 05, 2022

Unemployment in the Czech Republic Lowest in EU in October

Unemployment in the eurozone has dropped to a record low, at 6.5 percent in October, the EU’s Eurostat statistics office said Thursday. The reading — the lowest since Eurostat started compiling jobless figures in April 1998 — was an indicator that the economies of the 19 EU nations using the euro had bounced back after the Covid pandemic. The seasonally adjusted unemployment rate was markedly less than the 7.3 percent recorded a year ago. Data from the Czech Statistics Office indicates that unemployment in Czechia lay at 2.1 percent, compared to 2.2 percent in September. The country has had one of the lowest unemployment rates in the EU for several years now. Eurostat estimated that, for the entire 27-nation European Union, 12.95 million adults were unemployed in October — or 6.0 percent of the active population — with 10.87 million of them in the eurozone. While all OECD economies, with the exception of former EU member Britain, have recovered to their pre-pandemic size, global headwinds are stalling the recovery. The eurozone is likely to tip towards recession within weeks, according to the European Commission. Inflation is running hot, despite falling back in the latest reading on Wednesday, at 10 percent...

by Prague Morning Dec 01, 2022

Petition Launched to Cut Off Power, Water to Russian-Owned Buildings in Prague

More than 500 people have signed a petition calling for electricity, water and heat supplies to be cut off to all Russian-owned buildings in Prague, including those used by Moscow’s diplomats, in response to Russia’s massive missile strikes on Ukrainian energy infrastructure. The signatures are being collected in an effort led by a Czech group called Arms for Ukraine. “Over the past several weeks, Ukrainian towns and villages have been hit by unprecedented missile attacks unleashed by Russia,” the group behind the campaign said. The Arms for Ukraine group added: “The main targets have been power plants, heating plants and water systems. This new phase of the war has had disastrous consequences for the daily lives of civilians. Apartments, schools and kindergartens, shops and factories, but also hospitals have been deprived of power and water.” The group called on “state and private energy distributors to give Russian diplomats in Prague a taste of their own medicine,” according to iDNES. “We demand that all Russian-owned buildings be disconnected from gas, water and electricity,” it said. “Let’s give the Russian embassy in Prague a taste of its own medicine,” one of the originators of the petition, Martin Ondráček, wrote on social media. “Let’s show Russian diplomats how it feels to be freezing at night, like...

by Prague Morning Nov 29, 2022

Czech Presidential Candidates Reduced to Nine After Interior Minister Review

Twelve out of the 21 candidates who registered for the presidential election by the November 8 deadline were dismissed after the interior ministry reviewed the registrations, leaving all the businessmen heavyweights out of the race. All the long-term political favourites remain, and four of the dismissed candidates said they will appeal the decision at the Supreme Administrative Court. The main reason for the dismissal resulted from the verification of the collected signatures in support of the nomination. Candidates were required to present signatures of at least 20 parliamentarians, 10 senators or 50,000 Czech citizens. Businessmen Karel Divis, Tomas Brezina and Karel Janecek presented more than 50,000 signatures from their compatriots, but the ministry rejected too many of these signatures taking the number of signatures on the candidates applications beneath the prescribed threshold. Karel Divis was short by mere 116 signatures after the ministry rejected the incomplete signature files and ran two tests on samples from the remaining 61,438 signatures which yielded 17.847% and 19.765% mistakes rates. “As per the law a particular amount of signatures was deducted from the overall number of valid signatures and the result of Mr. Karel Divis is 49,884”, said head of the electoral department at the interior...

by Prague Morning Nov 28, 2022

Expat Wealth Management Strategies in an Uncertain Global Economy

Aisa International is an EU-based company in the Czech Republic that is relatively unique in the expatriate advice market. Aisa International provides investment advice through its discretionary management licenses and can act as a Securities Trader throughout the EU via passporting. All directors and owners of Aisa International have passed EU Security Traders exams, required for those that provide direct European investment advice. “We realised that psychology played a huge part in affecting outcomes, and bias was unavoidable within one group working to a common goal,” said Chris Lean, Investment Director, Aisa International. “Client psychology was entirely risk averse, feeling greater pain even where gains had previously outweighed losses.” Based on this philosophy, Aisa International built its plan using five key principles: Attitude to risk could not be a number in a chart, but a definition that a client could buy into. The key measurement was capacity for loss and risk aversion rather than gains. Portfolios had to be linked to measurements of risk and volatility, rather than targeting returns in short time periods. Portfolios have to be biased in content toward the geographic location of the client. Due diligence meant that active managers it utilised had to meet certain...

by Prague Morning Nov 22, 2022

Finmex Academy: Czechs Real Wages Are Getting Lower Despite Rising Salaries

The real wages of the people in the Czech Republic are set to drop by at least 8.3% by the end of 2022 as blistering inflation continues to eat into the income of the citizens. The recent figures for October showed a 15.1% rise of prices year-on-year, far above the average of 10.6% for the Euro Area and 11.5% for the European Union. The few European countries that managed to reach figures above these records are Poland, Hungary and the Baltic countries that had the worse inflation records for ten months of 2022. Prices in the Czech Republic have slowed down for the first time in two years as the government has taken some actions to support households amid high and rising energy prices. A slowdown of inflation came primarily in the form of energy and food prices as core inflation continues to rise by 1.2% month-on-moth, beating the forecasts of analysts. Prices are expected to continue to slow down in November and December amid government measures to stabilise energy prices, commented Martin Marsovsky, chief manager of Finmex Academy. On the other hand, wages for most of the sectors are rising too slowly to catch up with inflation. So, real wages...

by Prague Morning Nov 22, 2022

Nomura Holdings: Czech Republic at Risk of Currency Crisis

The Czech Republic, Romania and Hungary face the risk of exchange-rate crises over the next one year as fiscal and external challenges mount, according to Nomura Holdings Inc. The warning is based on analysis of eight indicators including FX reserves import cover, real short-term interest rates, as well as fiscal and current account measures, according to Nomura’s Damocles Index which assessed 32 emerging markets’ vulnerability to a currency crisis. Egypt, Sri Lanka, Turkey and Pakistan have already experienced crises but are not yet out of the woods, Nomura analysts Rob Subbaraman and Si Ying Toh wrote in a report Monday. Hungary’s forint is among the worst-performing emerging market currencies this year after a hold up in recovery funding from the European Union. Currencies of Romania and the Czech Republic have also declined more than 8% against the dollar. Vulnerability of emerging market currencies is now at the highest in more than two decades and gives an “ominous warning” of growing broad-based risks, the report said. xosotin chelseathông tin chuyển nhượngcâu lạc bộ bóng đá arsenalbóng đá atalantabundesligacầu thủ haalandUEFAevertonfutebol ao vivofutemaxmulticanaisonbetbóng đá world cupbóng đá inter milantin juventusbenzemala ligaclb leicester cityMUman citymessi lionelsalahnapolineymarpsgronaldoserie atottenhamvalenciaAS ROMALeverkusenac milanmbappenapolinewcastleaston villaliverpoolfa cupreal madridpremier leagueAjaxbao bong da247EPLbarcelonabournemouthaff...

by Prague Morning Nov 21, 2022

Czech Lawmakers Back Resolution Calling Russian Government ‘Terrorist’

Czech lower house lawmakers approved a resolution on Tuesday to designate “the current Russian regime as terrorist”. They condemned attacks on Ukraine’s infrastructure and refusing to recognise Russia’s claims to have annexed regions of eastern and southern Ukraine. The vote was taken before a report of a blast in NATO member Poland. Western allies said they were investigating but could not confirm a report it resulted from stray Russian missiles. Russia’s defence ministry denied Russian weapons were involved. “If someone behaves like a terrorist, he is a terrorist,” commented TOP 09 party spokesman Jan Jakob on the decision. CTK news agency reported 129 of 156 lawmakers present supported the resolution. Ukraine’s parliament chief Russian Stefanchuk thanked the Czech house after the vote. The Czech Republic has been a strong backer of Ukraine in its fight against the invasion by Russian forces that began in February. “If Poland confirms that the missiles also hit its territory, this will be a further escalation by Russia,” Prime Minister Petr Fiala said on Twitter. “We stand firmly behind our EU and NATO ally.” In the United States, senators introduced legislation calling on the US Congress to do the same and add Russia to its...

by Prague Morning Nov 16, 2022

Czech Wage Growth Below 5% Needed to Tame Inflation, Central Bank Governor Says

Czech central bank Governor Ales Michl said on Monday the state budget deficit needed to shrink and nominal wages should not rise too quickly next year, as the bank seeks to rein in inflation pressures. “For rate stability, we need two additional things that will cut the circulation of money in the economy, meaning inflation,” Michl wrote in a weekly column for the Mlada Fronta Dnes newspaper. He said results, not just words, were needed on the budget and nominal wages should not grow “more than, for example, 5%”. “Simply don’t rev the wage-inflation spiral,” he said. The central bank has held interest rates steady since June, after sharply raising them last year. Inflation hit 18.0% September, its highest level in three decades, but eased to 15.1% last month. Czech National Bank employees last week agreed to cancel previous contracts calling for wage rises corresponding to inflation. Czech real wages fell almost 10% in the second quarter, according to the latest data, and some central bankers see diminishing risks of a wage-inflation spiral. The central bank has forecast nominal wages to rise 6.3% in 2022 and 7.7% in 2023, but to fall 9.4% and 1.2%, respectively in real terms. xosotin...

by Prague Morning Nov 14, 2022

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