Preliminary data shows the Czech Republic’s trade balance in March ended in a record high of Kč 37.5 billion, up Kč 14.5 billion year on year (y/y), the Czech Statistical Office (ČSÚ) said Monday, but analysts see little reason to celebrate given the foreign trade dynamics.
“In March 2012, according to preliminary data of ‘border statistics’, exports and imports at current prices rose by 6.9% and 1.4% y/y, respectively,” the office said.
Compared to the previous month, seasonally adjusted exports and imports fell by 0.6% and 2.1%, respectively. “The development trend shows increasing exports (+0.1%) and decreasing imports (-0.1%),” the ČSÚ said.
Komerční banka analyst Jan Vejmělek said that although the March results “surpassed all expectations,” the “foreign trade dynamics proved disappointing” as in year-on-year terms, exports grew by 6.9% (Kč 17.8 billion) but imports were up just 1.4% (Kč 3.3 billion). “[Both] figures were significantly lower than market was expecting,” he said in a report. ‘[Weakness] in domestic demand, rather than foreign demand for Czech exports, that is behind the admirable performance of the foreign trade balance.’
“It is thus clear that it is weakness in domestic demand, rather than foreign demand for Czech exports, that is behind the admirable performance of the foreign trade balance. Sluggish domestic economic activity is reflected in lower imports, as companies limit investments and households are reluctant to consume,” Vejmělek said.
According to the ČSÚ, due to depreciation of the Czech crown against both main currencies, external trade grew slower in euros (exports +5.6% and imports +0.2%) than external trade expressed in crowns; and exports and imports converted to US dollar dropped by 0.4% and 5.5%, respectively.
Highlights by region and country
The trade balance with EU Member States in March showed a surplus of Kč 66.7 billion (up Kč 1.9 billion y/y). Trade balance with non-EU countries ended in a deficit of Kč 29.2 billion (down Kč 12.6 billion y/y).
Deficit decreased in trade with China (by Kč 7.5 billion) and the Russian Federation (by Kč 2.1 billion).
The balance improved in trade with the Ukraine (by Kč 2.4 billion) as a deficit turned into a surplus. Surplus rose in trade with the United Kingdom (by Kč 1.4 billion), Slovakia (by Kč 0.9 billion) and Germany (by Kč 0.8 billion). A drop in surplus was recorded in trade with the Netherlands (by Kč 2.5 billion) and Italy (by Kč 1.7 billion). The deficit deepened in trade with Korea (by Kč 1.9 billion)