CNB Raises Czech Deficit Forecast to 2.7% as Fiscal Pressures Persist

The Czech National Bank has revised its estimate for the country’s general government deficit in 2026 to 2.7 percent of GDP, up from its previous forecast of 2.5 percent released earlier this year, reflecting a slower pace of fiscal consolidation.

According to the central bank’s latest macroeconomic outlook, the deficit is expected to widen further to 3.1 percent of GDP in 2027. The revision comes amid continued pressure on public finances, despite gradual improvements since the pandemic period.

The CNB estimates that the fiscal shortfall narrowed to roughly the mid-2 percent range of GDP in 2024, with a slight increase in 2025. However, structural imbalances remain a concern. The structural deficit, which adjusts for economic cycle effects, is projected to rise from around 2.1 percent of GDP last year to approximately 2.6 percent in 2026.

Public debt is also expected to continue its upward trajectory. The central bank forecasts that government debt will increase to 45.7 percent of GDP in 2026, up from 44.3 percent a year earlier, before reaching 47.2 percent in 2027. While still below the European Union average, the trend reflects sustained fiscal pressures in the medium term.

On the macroeconomic side, wage growth is expected to remain relatively strong, although moderating compared to previous years. Nominal wages are projected to increase by 6.4 percent in 2026, following growth of over 7 percent in 2025, with real wage growth supported by easing inflation.

Labour market conditions are forecast to soften slightly. The unemployment rate is expected to rise to 4.8 percent in 2026 before edging down marginally in 2027, indicating a gradual cooling from historically tight conditions.

The CNB also anticipates a deceleration in residential property price growth. After a strong rebound in 2025, price increases are projected to slow to 8.3 percent in 2026 and further to 5.6 percent the following year, suggesting a more balanced market environment.

Overall, the central bank’s latest projections point to a period of moderate economic adjustment, with fiscal consolidation progressing more slowly while key macroeconomic indicators gradually stabilise.

India’s Infrastructure Push Tests Its Promise to Reshape Competitiveness

India’s aggressive infrastructure spending is rapidly becoming the defining feature of its economic strategy, but whether it can deliver a lasting boost to competitiveness and logistics efficiency remains a question of execution rather than ambition.

Capex Surge Signals Structural Shift

Public investment has more than doubled in just four years, rising from under ₹6 lakh crore in FY2021–22 to over ₹11 lakh crore in FY2025–26, according to the Ministry of Finance India. This marks a clear pivot toward capital-led growth, with policymakers prioritising infrastructure over consumption-driven expansion.

The scale is significant by emerging market standards, although headline projections for long-term infrastructure pipelines often combine both public and private investment, making direct comparisons less straightforward.

Connectivity Gains Begin to Show

India’s transport backbone has expanded steadily over the past decade. National highways have grown materially, improving freight movement between industrial and consumption centres and reducing transit times.

The impact is increasingly visible. The World Bank ranked India 38th in its 2023 Logistics Performance Index, reflecting progress in infrastructure, customs and shipment reliability.

Ports and rail systems are also undergoing upgrades, while dedicated freight corridors and multimodal logistics hubs are expected to further streamline long-distance cargo movement.

Logistics Reform Still a Work in Progress

Despite improvements, India’s logistics system remains cost-heavy and fragmented. Historically estimated at 12–16 percent of GDP, logistics costs have been a long-standing constraint on competitiveness.

Government initiatives such as the National Logistics Policy and the PM Gati Shakti platform aim to address these inefficiencies through integrated planning and digital coordination. However, independent estimates suggest costs remain above 10 percent of GDP, indicating that meaningful efficiency gains are still evolving rather than fully realised.

Competitiveness Gains Depend on Execution

Improved infrastructure has the potential to reshape India’s economic geography by linking hinterland regions more effectively to ports and industrial corridors. This could lower costs, support manufacturing growth and enhance export competitiveness.

Yet structural challenges persist. Land acquisition, regulatory complexity and uneven execution across states continue to slow project delivery and dilute impact.

A Long-Term Play, Not an Immediate Leap

India’s infrastructure drive represents a genuine structural shift toward investment-led growth. The direction is clear, and early gains are visible, particularly in connectivity and logistics performance.

However, the transformation into a globally competitive logistics and manufacturing platform will be gradual. The real test lies not in the scale of announced spending, but in the consistency and efficiency of delivery over the next decade.

Source: CIJ.World India Research & Analysis Team

China Updates Rules on Punitive Damages in Intellectual Property Cases

China’s Supreme People’s Court has introduced revised judicial guidance on the application of punitive damages in intellectual property infringement disputes, signalling a continued effort to strengthen protection for rights holders and tighten enforcement against repeat or deliberate infringers.

The new judicial interpretation, issued on 20 April 2026 and effective from 1 May 2026, replaces the previous framework introduced in 2021. The updated rules are intended to clarify how courts should handle claims for punitive damages in civil intellectual property disputes and to provide more consistent standards for determining compensation.

According to figures released by the Supreme People’s Court, Chinese courts concluded 1,471 intellectual property cases involving punitive damages between 2021 and 2025. Punitive damages were ultimately awarded in 505 of those cases, with total compensation reaching approximately RMB 1.8 billion in 2025 alone. Authorities said the revised interpretation reflects the growing use of the mechanism and the need to address new forms of infringement.

One of the main procedural changes concerns the timing of punitive damages claims. Under the revised rules, rights holders are generally expected to raise such claims before the end of first-instance oral proceedings. Claims introduced for the first time during appeal proceedings may only proceed through mediation if both parties agree. If mediation fails, courts are instructed to reject the request, and the claimant will not be allowed to file a separate lawsuit based on the same infringement.

The interpretation also narrows the application of punitive damages in unfair competition cases. Courts clarified that punitive damages remain available primarily in trade secret infringement disputes and do not generally apply to other unfair competition matters such as misleading advertising, commercial defamation or acts causing market confusion unless separate legislation specifically provides for it.

The revised framework further expands the circumstances in which courts may determine that infringement was intentional. In addition to previously recognised scenarios such as continued infringement after warnings or cases involving counterfeiting, the interpretation now includes situations where parties resume infringing activity after reaching settlement agreements with rights holders. Courts may also consider attempts to avoid liability through affiliated companies, nominee structures or changes in legal representatives as evidence of intentional misconduct.

Chinese courts were also given more detailed guidance on assessing whether infringement reaches the threshold of “serious circumstances”, a key condition for punitive damages. The new rules specify that infringers who derive most of their income from unlawful activities or effectively operate infringement as their principal business activity should automatically meet the seriousness requirement.

The interpretation additionally refines how damages are calculated. Courts are instructed to base punitive damages on actual losses, illegal gains or profits generated through infringement. Statutory damages may no longer serve as the calculation basis for punitive awards, reflecting an effort to distinguish punitive compensation from standard judicial compensation mechanisms.

In cases where infringement forms part of a company’s primary business activity, courts may use gross profit rather than operating profit as the basis for calculation, potentially increasing the level of compensation awarded.

Another notable revision concerns the multiplier applied to punitive damages. Chinese courts are no longer restricted to whole-number multiples and may apply more flexible calculations depending on the severity of the conduct and the level of fault involved. However, the total award remains capped at five times the calculation base, excluding reasonable enforcement expenses such as legal and notarisation costs.

The Supreme People’s Court said the revised interpretation is intended to improve consistency in judicial practice while strengthening deterrence against deliberate intellectual property violations. Legal observers expect the changes to increase pressure on businesses operating in China to strengthen compliance procedures and manage intellectual property risks more carefully.

Source: CMS

Czech Consumer Spending and Tourism Activity Continue to Strengthen in Early 2026

Consumer demand in the Czech Republic continued to improve in March, supported by stronger household spending, growing online sales and rising visitor numbers across the country.

According to newly released figures from the Czech Statistical Office, retail turnover excluding motor vehicle sales increased by 4.9 percent year-on-year in March, accelerating from the revised February result. Compared with the previous month, sales were also higher, indicating that domestic consumption remained resilient during the first quarter of the year.

The strongest contribution came from non-food retail categories and internet-based sales, while food retailers also recorded solid growth. E-commerce continued to outperform traditional retail segments, reflecting changing purchasing habits and sustained consumer demand.

Among specialist retailers, cosmetics, healthcare-related products and leisure goods posted some of the strongest annual increases. Clothing and footwear retailers were among the few segments to record a slight decline.

The automotive market showed a more moderate performance. Sales and repair activity for motor vehicles remained broadly stable on a monthly basis, although annual figures still pointed to modest growth.

The latest retail data aligns with wider improvements across the Czech service economy. Revenue generated by service businesses rose during the first quarter of 2026, with professional and technical sectors among the main drivers of expansion. Advisory services, legal activities and engineering-related businesses all reported stronger demand compared with the same period last year.

Hospitality and catering operators also benefited from improving consumer activity, although accommodation providers experienced a softer performance than restaurants and food-service businesses.

Tourism figures released alongside the retail data pointed to continued momentum in the travel sector. More than 4 million guests stayed in Czech accommodation facilities during the first quarter, marking another year-on-year increase in both domestic and international tourism activity.

Prague remained the country’s leading destination, attracting the highest number of visitors and overnight stays. Regional tourism also expanded, with several areas outside the capital reporting particularly strong growth rates.

Germany continued to represent the largest source of international visitors, followed by neighbouring Central European markets including Poland and Slovakia. Visitor numbers from the UK remained slightly below last year’s level, while arrivals from Southern Europe and North America continued to contribute to overall tourism growth.

The figures suggest that household consumption and tourism remain important pillars supporting the Czech economy in 2026, despite continued uncertainty surrounding the broader European economic environment.

Revetas Capital Sells Building A at Bonarka for Business Complex in Kraków

Revetas Capital has completed the sale of Building A at the Bonarka for Business (B4B) office complex in Kraków to Proton Property, a Kraków-based investor and developer active in the local market since 1995.

Located at ul. Puszkarska 7F, the office building offers approximately 8,300 sqm of gross leasable area across seven above-ground floors. The property also includes one underground parking level, surface parking spaces for a total of 170 vehicles, and bicycle infrastructure.

Building A forms part of the Bonarka for Business complex, one of Kraków’s larger office parks, comprising around 76,600 sqm of office space across eight Class A office buildings.

Tomasz Gawarecki, CEO of Proton Property, said: “We are very pleased with the completion of this transaction. This is a strategic move that will allow us to offer our clients yet another high-quality office building.”

Vlad Dragoescu, Partner and Head of Portfolio Management for Central and Eastern Europe at Revetas Capital, said the disposal forms part of the company’s ongoing asset management strategy for the B4B portfolio.

“The disposal of Building A forms part of our ongoing portfolio management strategy for Bonarka for Business and reflects continued investor interest in well-located office assets in Kraków,” Dragoescu said.

“While market conditions across the office sector remain selective, we continue to see strong long-term value in the B4B complex. We are pleased to complete this transaction with an experienced local investor with whom we share a constructive and relationship-driven approach.”

Antonio Pomes, Country Head of Portfolio Management at Revetas Capital, said Bonarka for Business continues to benefit from its location, connectivity and established tenant base.

“Bonarka for Business has established itself as one of Kraków’s leading office destinations, benefiting from its strategic location, strong connectivity and mature business ecosystem,” Pomes said.

Sykstus Gaczoł, Vice President of Proton Property, added: “This investment is proof of our faith in the potential of the Kraków office market. We believe that Bonarka Office will bring tangible benefits not only to our clients but also to the local community, stimulating further economic development in this part of the city.”

DLA Piper acted as legal advisor to Revetas Capital, while Kancelaria KKPW advised Proton Property on the transaction.

Auchan to Open Store at Fusion Complex in Łódź

Auchan Polska has signed a lease agreement with Echo Investment for approximately 1,200 sqm of retail space at the Fusion mixed-use development in Łódź. The store is scheduled to open during the summer holiday period.

The new outlet will be located in a revitalised historic red-brick building within the former industrial complex of Karol Scheibler. Situated on ul. ks. Wincentego Tymienieckiego, the store will form part of the expanding retail and service offer at the Fusion development.

According to the tenant, the concept will combine a modern convenience retail format with references to the industrial heritage of the site. The interior design will retain original architectural elements, including exposed brick walls, while incorporating wood finishes, subdued colours and greenery. Large-format historical photographs referencing the site’s industrial past will also feature throughout the store.

The shop will include two traditional cash desks, one customer service checkout and four self-service tills. More than 50 parking spaces will be available directly adjacent to the store. The unit will have two entrances, including one from the residential section of the development.

Hanna Bernatowicz, Communications Director at Auchan Polska, said: “The commercial offer will include a wide selection of food products, including an extensive 0% non-alcoholic product zone and a premium segment. Customers will also find products from local suppliers, including the Czarnocin and Jogo brands.”

She added that the offer will also include a bistro area serving coffee, drinks and ready-made snacks, alongside an in-store bakery section.

Fusion is being developed by Echo Investment on the site of the former Scheibler textile factory in central Łódź. The mixed-use scheme covers approximately 8 hectares and will comprise 22 buildings, including 15 historic structures undergoing revitalisation.

The project includes residential buildings developed by Archicom, office space, retail and service functions, public spaces and green areas, including the Anna Gardens square.

Fusion received two awards at the MIPIM Awards 2025, winning in the Best Urban Regeneration Project category and receiving the Special Jury Award. The architectural concept for the project was prepared by Medusa Group.

Panattoni to Develop 500,000 sq ft Logistics Scheme at Wakefield Europort

Panattoni has acquired a 23-acre site at Wakefield Europort in West Yorkshire from Delin Property, where the company plans to develop a speculative 500,000 sq ft cross-docked logistics and warehousing facility in joint venture with Newport by Panattoni.

The project, named Panattoni Wakefield 500, is scheduled to begin construction this quarter and will target BREEAM ‘Outstanding’ certification alongside net zero carbon in construction.

The development will include 56 dock doors, eight level access doors, yard depths of up to 50 metres, 62 HGV parking spaces, 384 car parking spaces and a 2.5 MVA power supply.

The scheme comes amid continued supply constraints in the UK logistics market, particularly for large-scale speculative developments. According to Panattoni, there are currently no speculative units of around 500,000 sq ft under construction in the Yorkshire region.

Wakefield Europort is located near Junction 31 of the M62, with access to the M1 and A1(M) motorways. The site also benefits from an adjacent rail freight terminal operated by Maritime Transport, supporting multimodal freight operations.

Andrew Preston, Senior Development Director at Panattoni, said: “Wakefield Europort is one of the strongest logistics addresses in Yorkshire, and this acquisition reflects our conviction that demand for large-format, high-specification space in this market is not being adequately served by existing supply.”

He added: “The combination of M62, M1 and A1(M) connectivity is rare at this scale, and the presence of a rail freight terminal adds a further dimension that is increasingly relevant to occupiers with sustainability commitments.”

Daniel Raemy, Chief Executive Officer at Newport by Panattoni, said the project aligns with the fund’s strategy of investing in logistics assets with long-term occupier relevance across Europe.

“Wakefield 500 expands our UK exposure into the big-box segment, combining scale, excellent motorway connectivity and intermodal potential in one of the country’s most established logistics corridors,” Raemy said.

He added that the development reflects the type of “institutional-quality” logistics assets the fund continues to target, particularly those aligned with evolving supply chain requirements and sustainability standards.

Hungary Faces Uncertainty Over EU Pay Transparency Rules Ahead of June Deadline

Hungary may not meet the European Union’s deadline for implementing the bloc’s new Pay Transparency Directive, creating uncertainty for employers ahead of the 7 June 2026 transposition date.

The directive, formally adopted by the European Parliament and the Council of the European Union in May 2023, is designed to strengthen equal pay rules across the EU by increasing salary transparency and improving enforcement mechanisms relating to gender pay disparities.

The legislation places greater responsibility on employers to demonstrate that pay structures are fair and non-discriminatory, shifting part of the burden away from employees seeking legal remedies in discrimination cases.

Although Hungarian authorities have started preparations for implementing the directive into national law, draft legislation has not yet been published, and it remains unclear whether the country will complete the process before the EU deadline.

Under EU law, directives generally do not apply directly to employment relationships in the private sector unless incorporated into domestic legislation. This means employees in Hungary would not automatically be able to rely directly on the Pay Transparency Directive in disputes with employers if the country misses the transposition deadline.

However, legal experts note that Hungarian courts are still required to interpret existing national legislation in line with broader EU principles. Existing provisions within Hungary’s Labour Code and equal treatment legislation could therefore be interpreted more strictly in future labour disputes, particularly in cases relating to equal pay.

The directive may consequently influence judicial decisions even without formal transposition into Hungarian law.

The new rules include employee rights to request information regarding their own pay level and average salary data for comparable roles, broken down by gender. Under the directive, employers would generally be expected to respond to such requests within two months.

If Hungary does not implement the directive by June, employers would technically remain subject only to existing Hungarian employment, equal treatment and data protection rules. Nevertheless, legal and HR advisers warn that businesses should not treat the delay as grounds for inaction.

Many employers are already being encouraged to review compensation structures, employee classification systems and internal reporting procedures in preparation for the eventual implementation of the legislation.

Advisers also note that rejecting employee requests for salary transparency information could create reputational or employee-relations risks, particularly as awareness of the directive grows across the European labour market.

With implementation timelines still uncertain, companies operating in Hungary are being advised to prepare internal processes in advance, including drafting information templates and reviewing wage structures, to ensure they can respond quickly once domestic regulations enter into force.

Source: CMS

Czech Mortgage Costs Remain Above Five Percent as Market Pressures Persist

Mortgage financing in the Czech Republic remained expensive at the beginning of May, with average lending rates holding above the five percent level despite slowing inflation and previous expectations of cheaper borrowing during 2026.

According to market monitoring data from Swiss Life Select Czech Republic, average mortgage pricing increased slightly month-on-month and has now reached its highest level since the end of 2024.

Financial analysts say the current market environment continues to be shaped more by developments in international financial markets than by domestic monetary policy alone. Rising long-term funding costs, geopolitical uncertainty and persistent inflation concerns are limiting banks’ ability to reduce mortgage pricing significantly.

Market participants note that longer fixed-rate mortgage products have become noticeably more expensive compared with shorter fixation periods. Banks remain cautious about long-term lending conditions due to uncertainty surrounding future inflation, economic growth and global financial stability.

Although the Czech National Bank has gradually reduced base interest rates over the past year, mortgage pricing has not followed at the same pace. Analysts explain that retail mortgage rates are heavily influenced by swap markets and broader financing conditions rather than central bank decisions alone.

Higher borrowing costs continue to affect household affordability. Even relatively small changes in mortgage rates can significantly increase monthly repayments over the duration of a loan, placing additional pressure on buyers already facing elevated residential property prices.

Banks are also becoming more cautious in selected areas of lending, particularly for investment-oriented residential purchases. Some lenders have tightened internal risk assessments or adjusted financing conditions for borrowers purchasing apartments intended for rental purposes.

Despite the recent increase in rates, analysts do not currently expect a sharp further rise in mortgage pricing. At the same time, expectations for a rapid return to the exceptionally low financing costs seen before the inflation cycle of recent years have largely disappeared from the market.

Economists increasingly believe the Czech housing finance market is entering a more stable but structurally higher-rate environment compared with the ultra-low interest period that characterised much of the previous decade.

While competition between banks continues, most market observers expect mortgage rates to remain close to current levels in the near term, with future developments dependent on inflation trends, financial market stability and broader economic conditions.

Swiss Life Asset Managers and Düsseldorf Advance D.STRICT District Development with Planning Agreement

Swiss Life Asset Managers and the City of Düsseldorf have signed a key points agreement for the “Metro Campus” development plan, marking another step forward in the planned D.STRICT mixed-use district in Düsseldorf.

The agreement was signed during the 2026 polis Convention by Düsseldorf Mayor Stephan Keller and representatives of Swiss Life Asset Managers.

The framework agreement defines several parameters for the future planning process, including development quality standards and neighbourhood management requirements. According to the parties involved, the agreement is intended to support the continuation of the zoning process, with construction potentially starting in 2027.

Holger Matheis, CEO of Swiss Life Asset Managers Germany, said the project aims to combine new housing with a broader mix of urban functions while integrating sustainability considerations into the planning process.

“With D.STRICT, we are creating an urban district that combines urgently needed housing with a modern mix of uses, while consistently considering sustainability and future viability,” said Matheis. “The key points agreement is a crucial next step in the successful collaboration with the City of Düsseldorf to realize this ambitious project.”

Mayor Stephan Keller said the agreement establishes a framework for the zoning process and provides greater planning certainty for the next stages of the project.

The planned district will be developed on a site covering approximately 73,200 sqm in the Flingern area of Düsseldorf. Current plans include around 1,500 residential units, including both privately financed and subsidised housing. Retail, restaurants, leisure facilities, daycare centres and public open spaces are also planned as part of the development.

Cornelia Zuschke, Deputy Mayor for Planning, Construction, Housing and Real Estate, said the project places emphasis on long-term urban quality and community integration.

“An urban neighborhood needs a robust urban planning framework and appropriately scaled, high-quality architecture. Our goal is for future residents to feel comfortable from the very beginning,” Zuschke said.

The development concept also includes car-reduced public spaces, mobility-sharing solutions and resource-efficient energy systems. According to Swiss Life Asset Managers, the project is targeting sustainability certification standards at gold level.

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