Overview of the latest economic events in the Czech Republic
The Czech koruna strengthened slightly against the euro on Thursday, reaching CZK 24.34 to the euro at 17:00, which means a two-cent strengthening compared to the previous close. Against the US dollar, it weakened by seven cents to CZK 21.03/USD. This is according to data from the server Patria Online. Investors are also monitoring inflation, which according to preliminary data Czech Statistical Office (CSO) stagnated at 3.2 percent in September, with energy and food prices rising the most. Czech National Bank (CNB) at the same time indicated that the base interest rate, which is currently held at 4.75 percent, could be cut slightly again before the end of the year.
There were several significant announcements in the FDI sector this week. Škoda Auto has confirmed the expansion of battery module production at its plant in Mladá Boleslav. The investment will exceed 7 billion crowns and will create around 800 new jobs. A South Korean company is also investing in Czech industry LG Energy Solution, which together with CEZ plans to build a battery recycling research centre on the site of the former Prunéřov power plant.
In the banking sector, the news that Commercial Bank has agreed to take over the fintech platform Roger, specialising in invoice finance for small and medium-sized enterprises. Transactions worth approximately 1.2 billion crowns is to strengthen the bank's digital portfolio and increase the availability of operational financing for sole traders. At the same time Czech Savings Bank announced that it has entered into a partnership with technology firm Apify to develop tools for automating data processes in banking.
Foreign investment
A significant transaction was also announced by the investment group PPFwhich has entered the Austrian telecommunications company Magenta Telecom through the acquisition of 20% shares from the Group Deutsche Telekom. According to analysts, this is a strategic move to strengthen PPF's position in European telecommunications.
According to the company's data CRIF - Czech Credit Bureau 575 companies went bankrupt in the Czech Republic in the first three quarters of this year, which represents a year-on-year increase of 10 %. The number of insolvency petitions rose to 830. Most bankruptcies were recorded in the construction and transport sectors. At the same time, however, the statistics show that new company births increased by 4 % year-on-year, indicating a partial recovery in the business climate. Prague Gas Company a E.ON Czech Republic also announced a joint project to upgrade gas infrastructure worth 3.5 billion crowns.
Annual Report National Budget Council (NBC) points out that although the Czech public finances are showing early signs of sustainability, they still require further consolidation. Increased defence spending is bringing the debt brake closer to the 2037 limit. Ministry of Finance of the Czech Republic is therefore preparing an amendment to the Act on Budgetary Responsibility to prevent excessive indebtedness of municipalities and regions.
Significant events outside the Czech Republic with global impact
PPF Investment Group has also announced a significant transaction with the acquisition of a 20% stake in Austrian telecommunications company Magenta Telekom from Deutsche Telekom Group. According to analysts, this is a strategic move to strengthen PPF's position in European telecommunications.
Precious metal prices continue to rise on world markets. Price Silver broke the record set in 1980 and reached 51 USD per troy ounce, Reuters reported. Investors are reacting to concerns about geopolitical tensions and a slowing Chinese economy. Shares of the mining company Newmont Corporation a Polymetal International have strengthened by more than 5 % in response.
The correction in technology stocks, especially companies, continues in the US markets NVIDIA, Apple a Microsoftwhich, after several weeks of growth, saw a decline of 2-3 %. European bourses, however, remained stable, supported by a 0.8 % rise in industrial production in Germany.
From a global perspective, the Czech economy is in relative balance, despite increased volatility on commodity markets and a slight slowdown in exports to Germany. Analysts expect the end of the year to bring stable GDP growth of around 2.1 %, driven mainly by investments in infrastructure and energy.
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