Czech economy to stagnate in 2012
Employers associations expect the Czech economy to stagnate in 2012. “Czech GDP will not grow by more than one percent , while unemployment will rise moderately and real wages will decrease, Milan Mostýn, spokesman of the Czech Confederation of Industry said.
Key issues for Czech firms will be the development of the German economy, a solution to the debt crisis in the euro-zone and the willingness of banks when it comes financing companies..
"Our basic scenario counts with a slow-down of economic growth to a rate of 0.3 to 0.8 percent year-on-year," Mostýn stated.
"Nevertheless, recent economic indicators as well as the unresolved debt crisis in the euro-zone force us to prepare also for a negative growth rate of between zero and minus one percent at least. And we are not even taking into account possible developments towards an increasing instability in the euro zone," Mostýn added.
Further will the economic development contribute to a rise of unemployment. "Our estimates move between 7 and 7.5 percent with an upward risk," Mostýn said.
The Confederation of Industries also expects2012 also a fall in real wages, especially in companies without signed tariff agreements, he remarked.
Agreements on wage growth in the order of several percent were signed in many companies at the turn of 2009 and 2010 when the economy grew quite dynamically. However, the agreed growth between 3 an 6 percent is now quite unrealistic. This concerns many large companies, Mostýn added.
