The Biz Sheet: Weekly business news briefing for Czechia

Large government deficits|Czechia registered its widest foreign trade deficit since it joined the EU (in 2004), data from the Czech Statistical Office (CZSO) shows. In 2022 it reached almost CZK 200 billion, a year-on-year increase of about CZK 190 million. More expensive oil and gas are the main reasons for the rise, according to the CZSO.

Car manufacturing on the up in 2022|Czech industrial output returned to its levels before Covid-19, Reuters writes. It grew by 1.7 percent last year. The most significant influence on this result was the production of motor vehicles, where output grew by more than a tenth year-on-year," Radek Matějka  from the CZSO said.

Czech truck manufacturer sees unexpected growth|Tatra Trucks saw sales of CZK 7.12 billion last year, ten percent more than planned. The company delivered 1,326 cars to customers the company said in a press release. In the previous year, the sales reached CZK 5.31 billion and 1,278 vehicles were sold. This year, Tatra plans to further increase production, and is working to develop a hydrogen-fueled truck.

Labor dispute shuts tire company|A strike by Czech employees of the Nexen Tire company (a South Korean firm) saw hundreds of employees protest against the firm’s Czech office owing to salary disputes last week. The proposed wage increase of 3 percent was deemed too little by the employees. The Nexen office which employees 1,000 people has been closed since last Tuesday. The strike is said to last until a collective wage agreement is reached.

CEOs fear inflation| Over 8 in 10 Czech CEOs “expect a decline in the Czech economy” next year, a survey by accounting PwC firm reveals. About 30 percent of them anticipate a significant drop in the nation’s economy. High inflation was said to be the biggest danger to 90 percent of companies’ bosses, ČTK writes, and 85 percent of them are worried about rising labor costs. Annual GDP growth is estimated at 2.4 percent for 2022 according to the European Commission. 

Energy prices driving inflation|According to economic analysts, inflation in January was between 16 and 19 percent, iDnes writes. This would represent a slight rise from the December figure, which was 15.8 percent. Česká spořitelna, for example, predicts inflation of 19 percent. The “fading effect of the [government’s energy] cost-saving tariff and the further increase in energy prices," are presently driving forward inflation, according to a Komerční banka analyst.

Record year for startups| Analysis by CzechCrunch shows that 2022 was a record year for Czech startups’ fundraising ventures. About 120 companies raised CZK 46.5 million, with the average investment value at CZK 339 million. The most popular industries in which money was invested were: data, artificial intelligence, e-commerce, and fintech. Venture capital firms that invested the most often were Presto Ventures, Nation 1, and Depo Ventures.

Remote-work rising| A fast-growing Czech start-up specializing in remote work has recently raised CZK 26 million in a new fundraising campaign. GoodAccess, which offers secure and remote access to IT systems, has captured the attention of the U.S. and U.K., with customers already in both countries. "The new investment will help us develop the channels through which we address larger companies with up to 500 employees and generally scale our activities," GoodAccess co-founder says.

Big bank profits| According to pre-audit data, Czechia’s major domestic banks recorded a net profit of CZK 104 billion in 2022 – an increase of CZK 35 billion from 2021, ČTK reports. This is the first ever time profits in history that banks’ profits have surpassed the CZK 100 billion mark. High interest rates, paired with inflation, are the main reasons for the increase. In the first half of 2022, banks collectively made over CZK 50 million.