Uncertainty Over Czexit Leaves Investors Spooked

Andrej Babiš, Czech Rule Of Law, European Union, Miloš Zeman

Prague, April 17 (CTK) – A total of 83 percent of foreign investors and two thirds of Czech companies are worried about the discussion on the Czech Republic leaving the European Union, according to a survey of the Czech-German Chamber of Commerce and Industry (CNOPK).


The Czech Republic is the most attractive country for investment in Central and Eastern Europe, the poll showed.


Investors are anxious about the Czech Republic’s political stability, with 75 percent of companies counting on worse and less predictable political situation in the future, the survey said.


Investors are worried about the lengthy talks on forming a new government, with two thirds seeing a country’s political situation as important for business.


The Czech Republic’s EU membership has been considered the best condition of running a business in the country, others including payment discipline and local suppliers’ quality and availability, the CNOPK survey said.


The country’s business conditions rated as the worst are availability of qualified workforce, political stability and tax system.


A total of 55 percent of companies expect to increase their investment volume, which is 14 percentage points more than last year.


A major part of investment is likely in digitisation and automation, with companies expecting it to bring them bigger independence on the labour market, Commerzbank’s Czech branch head Michael T. Kruger said.


Two thirds of exporters envisage growing turnover, and 53 percent expect increasing exports.


Last year’s end of the Czech National Bank’s (CNB) foreign exchange intervention regime clearly did not surprise exporters much, CNOPK executive board member Bernard Bauer said.


Investors see the economic situation in the Czech Republic as the best since 2002 when the poll started being carried out, with 73 percent considering it good.


Two fifths of investors project a wage cost increase above 8 percent, and more than a half expect a rise of 3-8 percent.


The poll was conducted in February among 130 respondents including CNOPK members and German companies operating in the Czech Republic.