1. Herbert Stepic: ČR will recover from crisis next year
http://zpravy.idnes.cz/mfdnes.asp?r=domaci_ekonomikh&v=200&c=1247447)
High-level overview of article:
Herbert Stepic, head of Raiffeisen International, said that the Czech economy generally reacts to global economic developments with a six-to-eight month delay, and he therefore expects the country to recover from the economic crisis by mid-2010. He said the central European region will remain attractive for investors due to its well-functioning tax system, highly educated managers and favourable currencies. (Overview from Prague Daily Monitor)
Our take:
Czech Republic’s recovery depends on GDP growth of it’s major partner, Germany. With the German economy looking to be one of the strongest in the EU coming out of this recession because of strong banks and low leverages, the future looks positive. Hopefully this estimate is on the negative side.
2. Czech labor costs one quarter of Germany’s
http://ekonomika.ihned.cz/c1-38170040-pracovnik-v-cesku-stoji-ctvrtinu-toho-co-v-srn)
High-level overview of article:
According to an analysis by the Institute for Economic Research in Kolín nad Rýnem, Czech labour remains cheap compared to western Europe despite a 7% increase in costs between 2000 and 2008. Still, the report anticipates that the Balkan countries, with lower costs per worker, will become more attractive for employers. (Overview from Prague Daily Monitor)
Our take:
Even though Czech’s labor costs are above those of their neighbors, we feel it will be a contender for years because of it’s more stable environment. For those companies not interested in political or legal or currency risks for the sake of marginal savings, they will chose the most stable environment. Other industries and companies who look only for the cheapest may move to other locations.
Right now we see many companies who have already setup offices here (for example, IBM and Lufthansa in Brno) moving more and more of their operations to these locations.
Updated/Aktualizováno: July 22, 2014,