The number of discovered cases of insurance fraud is growing more slowly, but the areas where the Czechs “try their luck” are changing. Very few things in our lives are certain, and that is why we have insurance in the world. But what is certain is the fact that if there is room for fraud somewhere, someone will always try to do it. There are many opportunities for insurance fraud, but swindlers in this area are slowly losing ground. That is at least what the data from our analysis shows. Read more at www.ceskovdatech.cz.
Questions about our future have arisen with the beginning of the New Year. How much will our salaries increase? Can the unemployment rate see any further decrease? Will the “real estate fever” continue? What will be the Czech National Bank’s response? With humility towards the capabilities of economic models, intuition of people in our profession and cognitive misrepresentation, let us slightly estimate what 2018 could be like.
One thing is clear. At the turn of 2017 and 2018, the Czech economy has been doing well. Even great. We have entered the New Year with a fast developing economy, sound internal and external macroeconomic stability and a healthy financial sector. As the economy shows a fairly significant degree of inertia in standard circumstances, the first months of 2018 will reflect the same spirit.
In view of the “openness” of the Czech economy, foreign development is of major significance. The optimism in the Czech economic environment is supported by the Purchasing Manager Index in Germany, or more precisely in the entire Eurozone, as well as by the pipeline of contracts which have been secured by Czech businesses with their foreign partners. Nevertheless, the global scene is not flawless. In 2018, attention will have to be given to the ongoing Brexit negotiations, elections in Italy, other measures of the European Central Bank, impacts of new regulations (MiFID2, PSD, GDPR) and the rather “overheated” financial markets, including the bitcoin fever.
The labour market is a bottleneck which will narrow even more in 2018. The unemployment rate cannot decrease much further and the need for workforce will transform increasingly more into pressure on wage growth. As the profit margins of businesses are largely the same as in other countries, wage inflation will turn into price inflation. However, we do not anticipate any drama. Concerns about high inflation have no relevance.
Growing prices will support the nominal rate of the Czech crown with real appreciation, closing the gap between the understated real exchange rate and its balanced level. This is not positive news for the Czech export which is, in fact, weakened by the appreciation of the Czech crown. While exports will be complicated by the strengthening of the exchange rate, the imports benefit from the rapidly growing domestic demand. The outcomes for the business balance and the foreign trade’s contribution to the GDP are obvious. In terms of stabilisation, the overheated economy will slightly cool down in this way.
Increasing interest rates is another method for the controlled mitigation of rapid growth and related risks. In 2018, the Czech National Bank will continue the first cautious measures taken in 2017 and increase its interest rates, probably several times. It would be appropriate if the fiscal policy also were pro-cyclical; however, this feature is usually disregarded.
Home affairs will have an important role to play. The economic development in 2018 will not be significantly affected by the domestic affairs but the effects in future years may be of major significance. Who will be in the government? Will the current government win the confidence vote in Parliament? Can we expect an early election? What will be the government’s economic policy? Will taxes be affected? Can we anticipate pension reform? Will the Czech government shift the Czech economy from an “assembly room” towards innovations, a higher added value… and higher wages and the standard of living?
At the end of the text, there are more questions than answers. The anticipation of the future development often consists of the ability to ask the right questions rather than seek clear answers.
Planning in a Digital World: Tomorrow will not Wait
Digitalization is changing the world around us, affecting more and more industries. Changes also occur in respect of planning: nowadays, the tools at our disposal can streamline planning, budgeting and forecasting (PBF) and make it more efficient and effective. In our latest study, we looked at whether Czech companies keep up with the current trends in planning – for example, whether planning is actually seen as a beneficial and key tool of corporate governance. Would you like to know how Czech companies plan or what the most frequent deficiencies are in respect of PBF and how to remedy them? Read a summary of the most interesting findings from the study and find out what planning should be like in a digital world.
Cognitive technologies transform the way finance functions of businesses work. How can cognitive tools be used in an organisation and how are other companies already doing it? And how can these technologies change the requirements placed on finance employees? Answers to these and many other questions can be found in Crunch time III, the guide to cognitive technology.
10th SheXO Club: In the Footsteps of Science and Lasers
Did you know that a scientific facility outside Prague houses the most powerful laser in the world that could bring the water in the Lipno Dam to the boil in 10 seconds? This time, the SheXO Club rode the technological wave, organising the anniversary 10th SheXO Club session at the Eli Beamlines laser centre in Dolní Břežany.
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