Economic headline news

The Finance Ministery announced on Wednesday that it plans to increase tax revenue by almost 30 billion crowns next year as a result of planned changes in tax laws.

Trade and Industry Minister Milan Urban said that two more reactors should be built in the recently opened Temelin nuclear power plant by 2015 to replace coal-fired power stations. Temelin's owner, the power utility CEZ, said it had no such plans so far.

EU Budget Commissioner Michaela Schreyer said on Thursday the Czech Republic's goal of joining the European single currency in 2009 or 2010 is attainable.

Vratislav Kulhanek, the head of Skoda Auto, part of the Volkswagen group, said the firm is working on projects that should enable it to enter the market in Iraq.

US arms concern Lockheed Martin said on Wednesday it is interested again in selling its F-16 air fighters to the Czech army. The Czech Republic last year cancelled a tender to buy modern fighter jets to replace its outdated fleet of Soviet-made MiGs.

Czech producer prices drop again

Czech producer prices dropped by 0.8 percent in April after a slight growth in March. The April decrease is the biggest monthly drop in Czech producer prices in more than two years. In year-on-year terms, producer prices fell 0.7 percent, extending their decline into the fifteenth consecutive month. The figures are way below expert predictions. The Czech Statistics Office said much of the decline was due to a drop in crude oil refinery prices after the end of Iraq war, and a fall in wholesale electricity prices after power utilities switched to cheaper, summer tariffs. Analysts believe the trend will be reversed in later in the year and producer prices will start growing again.

Retail sales fall sharply in March

The growth in Czech retail sales slowed sharply in March, to 1 percent year-on-year in March, after surprisingly strong 4-percent growth in February and over 4 percent in January. The slowdown was much steeper than expected. The Czech Statistics Office attributes the dip partly to Easter. The office said the development of sales was partly influenced by the fact that last year, purchases of goods ahead of the Easter holiday took place towards the end of March, whereas this year, Easter fell in April. This suggests retail sales should be in for a rebound in April. Fuel and car sales maintained strong growth rates, posting rises of 5.7 percent and 7.3 percent respectively. Falling consumer prices, high wage growth and record low interest rates are stimulating consumer demand, helping to prop up the Czech economy.