The Czech National Bank (CNB) Board cut its interest rates by 50 basis points. The key 2-week repo rate was set at 4.75%. Market participants anticipated the rate cut, however the CNB surprised by the extent of the move. Lower rates could help sustain or even accelerate the growth in domestic demand, and this might balance the expected downfall abroad, Hence, the Czech economic growth could be protected from the negative global trend.
GDP grew by 0.1% in the euro-zone and by 0.2% in the EU15 during the third quarter of 2001, compared to the previous quarter. Compared to the third quarter of 2000, GDP rose by 1.3% in the euro-zone and by 1.4% in the EU15, after an increase of 1.7% in both areas in the second quarter of 2001. Household consumption and foreign trade surplus remain the main sources of the economic growth.
Czech Press Agency quotes Industry Minister Miroslav Gregr saying that CEZ, the transmission-grid operator CEPS (fully owned by CEZ), and six regional distributors will all be privatized together, despite the Anti-Monopoly Office’s warning that this would thwart competition in the sector. Mr. Gregr said he has “measures that will enable the process to carry on.”
Business confidence indicator in the Czech Republic remains stable in most of economic branches in November as well as an indicator of consumer confidence.
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