The CZK 12.8 billion surplus in the Czech Republic’s foreign trade in September exceeded analysts’ expectations. However, they pointed out that the positive trade balance was due to a faster decline in oil and gas imports rather than economic growth compared to electricity exports. According to data released today by the Czech Statistical Office (ČSÚ), imports fell 16 percent year-on-year to CZK 352.2 billion. Exports amounted to CZK 364.9 billion, down 10.2 per cent from last year.
“A return to positive values does not mean growth. We got into surplus not because of export growth, but because it is falling slower than imports,” said Tomas Volf, Citfin’s chief analyst. He added that exports are declining despite the weakening crown. “The Czech National Bank’s next steps should also speak in favour of exporters, as the debate on the date of the start of the rate cut is generally intensifying,” he said.
In September, both prices and imported energy fell year-on-year, according to UniCredit Bank analyst Jiri Pour. “The slowdown in imports in other commodity groups was mainly related to the reduction in domestic industrial production and probably also to the continued dissolution of companies’ inventories,” he added. He pointed out that year-on-year, the trade balance improved the most with Russia, by CZK 18.3 billion, or with China, when it rose by CZK 14.8 billion.
According to Komerční banka analyst Jana Steckerová, the market expected a foreign trade surplus of CZK 6.4 billion in September. She also pointed out that while in the first nine months of last year foreign trade ended in a deficit of CZK 150 billion, this year the balance is positive with CZK 76.9 billion. Overall, the surplus is expected to reach 100 billion crowns this year, she said.
“For the rest of the year, we expect foreign trade to contribute positively to the Czech GDP. However, there is a risk of further escalation of the war in the Middle East, which may result in higher oil prices, but also natural gas,” Raiffeisenbank analyst Martin Kron told the Czech News Agency. According to him, the development of the Czech Republic’s foreign trade also depends on the recovery of the German economy, which is likely to be slower than the market expected.
According to ČSÚ data, exports increased by 0.6 percent month-on-month after seasonal adjustment, while imports fell by 0.3 percent. Year-to-date, exports are up 0.9 percent, while imports are down 5.8 percent.
Source: CTK
