Overview of the latest economic events in the Czech Republic

The Prague Stock Exchange continued its downward trend and fell below the psychologically important 2500 points. Index PX lost 0.32 percent to close at 2,494.57 points. Among the leading issues, it lost over a percent Erste Bank, the shares of the energy group also weakened slightly ČEZ a pojišťovny VIG, a slight deterioration in Komerční banka. The market is reacting to a combination of domestic and global uncertainties - rising fuel prices, the unresolved situation in the Strait of Hormuz and corporate earnings.

Přitom výsledky ČEZ for the first quarter of this year turned out well. On Thursday, the group reported net profit of CZK 14.5 billion - a 13 percent year-on-year increase. A key factor is the end of the so-called windfall tax, which in previous years had weighed heavily on the group's finances. On the other hand, operating income fell by nine per cent to CZK 85 billion and operating earnings before interest, taxes, depreciation and amortisation (EBITDA) fell by 18 per cent to CZK 35.3 billion - driven by a fall in realised prices for electricity generated as a result of excess capacity on the market.

Meanwhile, the energy crisis is having a significant impact on the daily lives of Czechs. The agency's survey STEM showed that the rise in fuel prices in recent weeks has affected about half of Czech households and one tenth of them are facing severe financial difficulties. Diesel car owners are facing greater problems and are particularly sensitive to the rise in diesel prices, which rose by 27.6 per cent month-on-month in March. People are responding by seeking out cheaper filling stations, cutting back on car journeys or cutting back in other spending categories.

Foreign investment

A breakthrough in the world of quantum technology: a US firm IonQ, a leading player in quantum computing, announced its intention to buy chipmaker SkyWater Technology for $1.8 billion. IonQ intends to use the production capacity SkyWater to test the planned 200,000 qubit chips by 2028, a key step towards building the first fully integrated quantum platform with its own manufacturing facilities. Both boards unanimously approved the transaction; closing is pending regulatory approval.

In the field of satellite technology, the US Federal Communications Commission (FCC) approved the acquisition of the satellite division Amazon Leo (network operator Kuiper) - once the regulatory conditions are met Amazon becomes a direct competitor SpaceX in low-orbit satellites and plans to deploy direct mobile connectivity (D2DBoth transactions have an indirect impact on the Czech economy through future supply and demand chains in the high-tech sector.

A groundbreaking step has taken place in global aviation: the boards of South Korean Korean Air a Asiana Airlines have signed a formal merger agreement, which is scheduled to be completed by December 2026. The merger will create a South Korean airline mega-carrier - Korean Air at the same time completed the acquisition of a 63.88% stake in Asiana Airlines as early as December 2024 and the signing of the agreement represents the last key step before the legal merger of the two entities. Upon completion of the merger, the company will file Korean Air a request to the Korean Ministry of Transportation. The transaction is seen as a model example of Asian aviation consolidation, which is still only being talked about in Europe.

Significant events outside the Czech Republic with global impact

The most watched geopolitical and economic event of the day is taking place in Beijing. US President Donald Trump has arrived in the Chinese capital - the first US president since 2017. He met with Chinese President Xi Jinping at the Great Hall of the People's Assembly. Xi said at the opening of his visit that China and the US should be partners, not rivals, and warned Trump that a misstep by the US on Taiwan could lead to a clash between the two countries. Trump responded that US-China relations will be better than ever and that his relationship with President Xi is „fantastic.“.

Trump is accompanied to Beijing by the heads of the biggest American companies - Elon Musk (Tesla, SpaceX), Jensen Huang (Nvidia), Tim Cook (Apple), David Calhoun (Boeing), Ryan McInerney (Visa) a Jamie Dimon (JPMorgan Chase). The trade agenda includes Chinese commitments for aircraft purchases Boeing, American agriculture and energy. Secretary of State Marco Rubio ahead of the talks, he called on China, as Iran's largest oil customer, to pressure Tehran to ease its blockade of the Strait of Hormuz. The U.S.-China trade war from 2025, when tariffs exceeded 100 percent, was frozen by a one-year truce in October - Trump's visit is expected to extend and expand that agreement.

The situation regarding the Strait of Hormuz remains volatile. The ceasefire between the US and Iran is formally in place, but negotiations on a permanent deal are going in circles: Iran refuses to negotiate on its nuclear programme before a permanent peace and insists on US compensation for war damage, while Trump calls the Iranian counter-proposal „absolutely unacceptable“. US inflation hit 3.8 per cent in April - the highest in almost three years - with the energy component adding over 22 per cent year-on-year. Analysts Deutsche Bank warn that each additional week without the opening of the Strait increases the risk of stagflation in Europe and the US.

gnews.cz - GH

Pozn.: YTD (Year-to-Date) comparison of results since the beginning of this year; YoY (Year-over-Year) comparison with the same period last year

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