Overview of the latest economic events in the Czech Republic

The Prague financial market recorded a positive development in June, when banks and building societies granted mortgages worth CZK 37.5 billion. This represents a month-on-month increase of 9 %, with new loans excluding refinancing rising to CZK 29.4 billion, 7 % more than in May. The average mortgage rate fell slightly from 4.6 % to 4.56 %. According to the Czech Banking Association Hypomonitor this trend indicates a gradual stabilisation of the property market and a slight recovery in household demand.

Společnost E.ON Energieoperating in České Budějovice, recorded a 14.8 % growth in sales to CZK 79.25 billion last year. Net profit, however, fell by 9.2 % year-on-year to CZK 3.19bn. The company delivered 12 TWh of gas and 9.5 TWh of electricity. This development is the result of the difficult situation on the energy market and continued investments in infrastructure modernisation.

The Ministry of Agriculture has published an update on the cereal harvest. Due to the cold weather, the harvest was delayed, with 64,387 hectares harvested so far, which is only 5.35 % of the planned area, compared to 13.45 % last year. The State Agricultural Intervention Fund expects an average harvest of around 6.82 million tonnes of cereals and 998 thousand tonnes of rapeseed.

Foreign investment

In the area of international expansion, the Austrian Erste Group, the parent company České spořitelny, the planned acquisition of fintech startup Payvision based in the Netherlands. The acquisition is expected to expand the Group's digital services in Central Europe and contribute to the growth of the cashless payment market.

Meanwhile, an American corporation Amazon has entered into an agreement for the construction of a new logistics centre near Brno, with an investment exceeding CZK 4.2 billion. It is expected to create more than 2,000 jobs and directly involve Czech subcontractors.

Německý Siemens Digital Industries has confirmed that it will expand its automation-focused development centre in Ostrava with an investment of CZK 1.8 billion. The centre will collaborate with VŠB-TU Ostrava and create a space for research in the field of artificial intelligence in industrial applications.

Japonská společnost Panasonic announced that it will move part of its battery component production from China to Pilsen, where it already operates an assembly plant. This is due to US trade tariffs and diversification of supply chains.

Significant events outside the Czech Republic with global impact

China's economy grew by 5.2 % year-on-year in the second quarter, although this was a slight slowdown from the previous quarter. The Chinese statistics bureau pointed to resilience in the face of US tariffs. This development had a positive impact on shares of companies such as Alibaba a TencentThe growth also boosted interest in commodities including copper and iron ore.

Americká banka JPMorgan Chase announces intention to buy asset manager UK-based Schroders Investment Management for $8.7 billion. This transaction is part of a broader strategy to expand into the European market, particularly post-Brexit, and marks a move towards greater integration of global investment services.

Francouzský LVMH has entered into an agreement to take over a Swiss watchmaking house Breitling for €5.4 billion, strengthening its position in the luxury watch segment. The luxury goods market thus continues to show a high degree of consolidation despite global inflationary pressures.

Saúdská Aramco a indická Reliance Industries have announced a strategic partnership in the petrochemical sector with plans to build a joint venture plant in Gujarat at a cost of more than $10 billion. The project is expected to reduce India's dependence on refined fuel imports and boost domestic industry.

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