The foreign trade of the Czech Republic ended in January after eleven months of deficit in surplus, which reached 9.5 billion crowns. It was 2.1 billion crowns higher year-on-year. Both imports and exports grew at a double-digit rate compared to last January. This follows from preliminary data published today by the Czech Statistical Office (ČSÚ).
Prague – The foreign trade of the Czech Republic ended in January after eleven months of deficit in surplus, which reached 9.5 billion crowns. It was 2.1 billion crowns higher year-on-year. Both imports and exports grew at a double-digit rate compared to last January. This follows from preliminary data, published today by the Czech Statistical Office (CZSO). According to analysts, the cheapening of fossil fuels contributed to the foreign trade surplus.
According to statistics, January is traditionally associated with a positive trade balance. This has been the case in Czech foreign trade in goods since 2010. “This time, the export of motor vehicles was especially successful, which in the monitored month grew by almost a quarter year-on-year and slightly exceeded CZK 100 billion,” said Stanislav Konvička, head of the trade balance department of the CZSO.
Exports in January increased by 12.1 percent year-on-year to 375.5 billion crowns and imports by 11.8 percent to 366 billion. This January had one more working day than last year. Month-on-month, after seasonal adjustment, exports increased by 0.4 percent and imports by 2.3 percent.
According to statistics, the overall balance of foreign trade was positively influenced by the year-on-year surplus of trade in motor vehicles by six billion crowns. The trade deficit in base metals decreased by 2.1 billion, and the positive balance of other means of transport increased by 1.7 billion crowns.
On the other hand, the adverse effect was primarily a larger deficit in trade in computers, electronic and optical devices by 2.5 billion crowns, refined petroleum products by 1.5 billion crowns and oil and natural gas by 1.3 billion crowns, which was the result of higher imported quantities. “The transition from assets to liabilities worsened the balance of agricultural products by CZK 1.4 billion,” added the statisticians.
The balance of foreign trade with EU countries improved by CZK 19.8 billion year-on-year in January. The trade deficit with countries outside the EU widened by CZK 17.5 billion.
Analysts: Cheap fossil fuels contributed to the surplus
The decrease in the price of fossil fuels on world markets contributed to a large extent to the Czech foreign trade surplus in January. Analysts interviewed by ČTK agree on this. At the same time, they assume that the trade balance will end in a deficit for the whole year, but it will be significantly lower than last year's 198 billion crowns.
“As expected, exports were positively affected by the improvement in the situation in the automotive industry, which was positively reflected in the growth of exports and the improvement of the surplus balance of trade in motor vehicles. The import side continued to be burdened by high prices of imported energy commodities, but it is clear that the price effect is weakening , which in the coming months will be positively reflected in the overall performance of foreign trade and year-on-year improvement in the trade balance,” said Akcenta analyst Miroslav Novák.
“Last year, due to the import of very expensive fossil fuels, especially natural gas, the trade balance fell into a very deep deficit, with the improvement of the situation on the energy markets, the situation is returning to normal – in December the trade balance was balanced, in January it was in surplus,” said the economist Deloitte Václav Franč. However, he pointed out that the shutdowns in the automotive industry in February could negatively affect the development of the trade balance.
“This year should be marked by a gradual improvement in the Czech trade balance. The main factor in this development will probably not be the improvement in export performance, which will remain dampened by the slowdown of the processing sector in the country and on partner markets, as well as by the decrease in the volume of imported energy raw materials. These will most likely not repeat the rocket price hikes from last year,” said Cyrrus chief economist Vít Hradil.
The CEO of CzechTrade, Radomil Doležal, highlighted the increase in the volume of exports compared to January 2022 and 2021. “The exchange rate of the domestic currency is working against exporters, which is holding and will probably remain at unusually strong levels in the coming months. The development of the situation in Ukraine will also be important, which is difficult to predict, but Czech companies are ready to participate in the most necessary supplies,” he said. According to him, CzechTrade is also mapping the possibilities of the involvement of Czech companies in the reconstruction of the regions of Turkey damaged by the February earthquake.
Analysts assume that the trade balance will again end with a deficit for the whole year, but lower than last year. “This year, we expect the trade balance deficit to be roughly halved, to 110 billion crowns. The result should be reflected in the better performance of the domestic industry, lower prices of energy raw materials and enough production parts for the automotive industry,” said Komerční banka analyst Jana Steckerová. According to Hradil, the Czech Republic will probably return to a surplus trade balance in 2024.