The Czech economy entered 1995 with a surplus state budget, a lower January inflation rate compared to the previous two years, with a slight seasonal increase in unemployment, growing foreign exchange reserves and with interest rates PRIBOR lower than recorded on the interbank market at the end of last year.
Consumer prices in January grew by 1.4%. About two-thirds of this increase was due to
- higher prices of foodstuffs, particularly milk and milk products, vegetables and potatoes,
- centrally increased heat prices, where the top limit was moved up by 10%.
In a year-to-year comparison consumer prices grew by 8.9%, thus being below 9% for the first time since mid-1992.
The state budget for this year is drawn as balanced with revenues and expenditures of CZK 411.7 bn. In January it ran a cash surplus of CZK 6.7 bn.
Budgetary revenues were CZK 38.2 bn (9.3% of the planned annual volume) and were CZK 3.9 bn higher than the average monthly aliquot (8.3%). More favorable results were achieved particularly in
- value added tax - CZK 9.9 bn (11.3% of the annual amount),
- consumer taxes - CZK 5.0 bn (10.8% of the annual amount).
The budget was not fulfilled in the case of income taxes of natural and juridical persons (6.8% of the annual amount) and customs duty revenues (8.0% of the annual amount).
Budgetary expenditures ran to CZK 31.5 bn (7.7% of the annual amount), which was CZK 2.8 bn less than the average monthly aliquot (8.3%). While household transfers and expenditures for public household consumption reached 13.1% of the annual amount, due to seasonal influences a low fulfillment was recorded, especially for expenditures on investments of budgetary and subsidized organizations (2.1% of the annual amount) and for investment and non-investment transfers to firms (2.6% of the annual amount).
Compared to December 1994, the January 1995 unemployment rate rose by 0.2% to 3.4%. The number of new job applicants grew (+17.3 thousand persons), while the number of vacancies available was unchanged. This is a consequence, among other things, of the seasonal decline in job opportunities in construction, agriculture and forestry.
The lowest unemployment rate continues to be registered in Prague (0.3% in January). In the regions of Central Bohemia, South Bohemia, West Bohemia and East Bohemia, the January unemployment rate was below average (2.3%-3.0%). Three regions registered an above average unemployment rate: South Moravia (3.6%), North Bohemia (4.7%) and North Moravia (6.0%).
The foreign exchange reserves of the banking system increased to USD 9.2 bn as of the end of January, of which central bank reserves total USD 6.7 bn.
In January the central bank repurchased USD 375 mil. from the interbank market through fixing. Roughly 70% of these funds came from foreign banks, the rest from an offer by Komercni banka resulting from a syndicated loan taken out by this bank.
The foreign exchange reserves of commercial banks dropped by USD 83 mil. in January and amounted to USD 2.5 bn. Short-term liabilities of commercial banks increased at the same time by USD 115 mil. and were converted into crown and foreign exchange credits granted to domestic clients.
The uninterrupted increase in interbank interest rates PRIBOR, which lasted throughout the entire second half of last year, ended in January and the rates fell compared to December. The reason was predominantly the excessive liquidity in the banking system, The rate of decline was different for individual rates, 0.25% (O/N rate) and 1.19% (three-month rate).
For its interventions on the money market, the central bank used, in particular, repo tenders or reverse repo tenders and on the basis of their results then implemented individual repo operations, or direct purchases or sales of short-term bonds.
On 14 February, the Prague Stock Exchange ended trading in shares of companies introduced mainly after the first wave of voucher privatization. After a one week break, the PSE will offer shares to be traded, supplemented with items from the second wave of voucher privatization.
Of this year's 29 sessions, only six registered a rising price trend (three at the beginning of January, three at the beginning of February) and during two sessions prices stagnated. In all other sessions prices recorded a marked downward trend during which the CNB-120 Index fell to its lowest level so far, 677 points (February 1). Since the year beginning, the index has lost 72 points or 9.56%. As well, the main industries suffered losses:
( 95/01/16 - 95/02/14 - Change (%) )
CNB-120 Index ( 753 - 681 - 9,56 )
of which:
Food-processing industry ( 669 - 587 - 12,26 )
Construction and building
material production ( 1 414 - 1 330 - 5,94 )
Engineering and electrical
engineering ( 610 - 575 - 5,74 )
Energy (926 - 831 - 10,26 )
Financing ( 521 - 451 - 13,44 )
of which:
Monetary system ( 447 - 370 - 17,23 )
Trade and services ( 677 - 606 - 10,49 )
This year, trades in shares of firms making up the CNB-120 Index have amounted to CZK 1 692.3 mil., i.e. CZK 58.4 mil. per session. Three quarters of all trades were with shares of financial institutions and energy-generating corporations.