While the Czech public paid little attention to the latest economic data, the time will almost certainly come when it will be impossible to ignore. The outlook for growth for the coming years is decidedly grim, especially given that tax revenues are falling far below expectations, writes Jaroslav Ungerman, chief economist for the Bohemian and Moravian Confederation of Trades Unions (ČMKOS).
Czech manufacturing performance deteriorated for a third month in June as new export business in the sector fell for an eight month running due to the ongoing crisis and uncertainty in Western European markets, an industry gauge published Monday showed.
The Czech National Bank (ČNB) has cut its key interest rate by a quarter of a point to a record low 0.5 percent, in line with market expectations, with months of sluggish domestic demand having sparked an economic recession.
Czech gross domestic product dropped 0.8% quarter on quarter in Q1 and 0.7% year on year, in large part due a drop in domestic demand, despite rising exports over the quarter, data published by the Czech Statistical Office (ČSÚ) on Friday showed. The office’s flash estimate of May 15 had indicated a 1% drop in GDP.
Governments in the eurozone’s periphery are pursuing a scorched earth fiscal strategy. Distressed governments may not be able to afford a fiscal stimulus or even a delayed consolidation, partly because of the size of their deficits and partly because they do not fully control the currency in which that debt is issued, writes John Springford, a research fellow at the Centre for European Reform (CER).
Corruption is undermining economic stability in Europe, the anticorruption watchdog Transparency International said in a report issued this week. The Czech Republic has shown a worrying “rollback” since joining the EU, it said, with public procurement and political-party funding areas of particular concern. But no European country received a clean bill of health in the watchdog’s so-called corruption integrity check.
The Czech trade balance for April ended in a surplus of Kč 22.0 billion, up Kč 8.8 billion year-on-year (y/y) but below market expectations, according to preliminary data published by the Czech Statistical Office (ČSÚ) said Wednesday.
Czech manufacturing new orders dropped sharply in May contributing to “the greatest overall worsening in business conditions in the goods-producing sector since August 2009,” an industry gauge said Friday.
Czech Prime Minister Petr Nečas (Civic Democrats, ODS) gave a brutal warning that the country’s budget deficit could jump to a staggering 6.0 percent of GDP if the billions of euros in payments from EU funding for programs now frozen — due to doubts in Brussels about how the money has been used and accounted for by the Czechs — are not cleared up.