Comments on the geographical orientation of external trade for February 2011

Press release

4/28/2011
8:00 AM

According to the Czech Statistical Office’s preliminary data, in February exports and imports increased 18.4% and 20.5%, respectively, in current prices on a year-on-year basis. The results were influenced by the low reference base of February 2010, when the volume of external trade had the second lowest monthly value in 2010. Faster growth of imports vs. exports continued for the twelfth month. The surplus on trade was CZK 13.7 billion, down by CZK 0.9 billion year-on-year.

External trade with EU countries ended up in a surplus of CZK 53.2 billion. In trade with non–EU countries, deficit deepened by CZK 8.0 billion year–on–year. Surplus increased in trade with Germany, France and Slovakia. Moving from deficit to surplus, trade with the US improved. On the other hand, deficit deepened in trade with China and Russia.

February statistics suggest that Czech exports to Canada, Belarus, Argentine, Estonia and Azerbaijan grew at the fastest rate. Three post–Soviet republics are among these five countries, which fact reflects Czech exporters’ interest in these markets. In percentage terms, the highest rate of growth for January and February 2011 can be seen in exports to Azerbaijan, with an index of 241%. Although Azerbaijan accounts for only 0.1% of the Czech Republic’s total exports, that country’s general development, with its enormous GDP growth rates in the past ten years and positive ratings given by rating agencies, indicates a major opportunity.

“According to local statistics, machines, electrical equipment and vehicles predominate in imports to this country, which is endowed with a wealth of mineral resources. Call for tenders are also published there for the modernisation of oil pipelines, refurbishment of hospitals and the development of alternative energy sources,” notes Jaromír Chabr, Head of Trade and Export Finance at KB. “It is precisely on the occasion of supplies for capital investment projects that it is advisable to also submit in the tendering process, an offer of financing from the Czech Republic in the form of export buyer’s credit, which for the Czech exporter also means the certainty of payment in addition to a competitive advantage. Komerční banka has extensive experience with providing such special-purpose credit; for a deal signed last year, Komerční banka has received a prestigious award from the global magazine Global Trade Review,” adds Jaromír Chabr.

Incoming payments for 2010 dropped to one third of the volume of 2009, from CZK 63 million to CZK 18 million. The development for the first three months of 2011 has indicated so far a continuously decreasing volume of incoming payments. The overall volume for the first quarter of 2011 is less than CZK 4 million. A large part of these transfers are for road and railway equipment, cut glass and ceramics.

On the other hand, the volume of outgoing payments significantly increased in 2009 and 2010, from CZK 825 million in 2009 to CZK 3,681 million in 2010. Data for the first quarter of 2011 also indicates that this trend will continue – the volume was slightly over CZK 1,000 million. More than 90% of the volume of outgoing payments is again payments related to deliveries of railway equipment.