Comments on the geographical orientation of external trade for January 2011

Press release

3/23/2011
8:00 AM

According to the Czech Statistical Office’s preliminary data, in January exports and imports increased 28.4% and 30.9%, respectively, in current prices on a year-on-year basis. The surplus on trade was CZK 15.7 billion, up by CZK 0.4 billion year-on-year.

According to the CSO’s preliminary cross-border statistics, exports and imports increased by 5.2% and 6.0%, respectively, month-on-month, net of the seasonal effect. The trend of the development indicates growth in exports and imports by 3.4% and 2.7%, respectively.

Exports and imports increased by 28.4% (CZK 49.5 billion) and 30.9% (CZK 49.1 billion), respectively, in current prices on a year-on-year basis. The results are affected by the low reference basis of January 2010 (the lowest monthly values of exports and imports in 2010). A faster growth in imports compared with exports continued for the eleventh month. Due to the Czech currency’s stronger euro rate, external trade grew faster (exports by 37.2% and imports by 39.9%) in terms of the euro than in terms of the Czech crown. The Czech currency’s US dollar rate stayed at the same level as in January 2010, and exports and imports converted to US dollars therefore registered the same rates of growth as external trade expressed in Czech crowns.

External trade with EU countries ended up in a surplus of CZK 58.7 billion, up by CZK 9.9 billion y/y. In trade with non-EU countries, deficit deepened by CZK 9.5 billion to CZK 43.0 billion. The positive balance increased in trade with Germany, by CZK 3.1 billion, Austria, CZK 1.9 billion, France, CZK 1.9 billion, and Slovakia, CZK 1.1 billion. On the other hand, there was a deeper deficit in trade with China, by CZK 9.9 billion, and Russia, CZK 1.1 billion.

Looking at the highest increases in exports for January 2011 compared with January 2010, exports to Azerbaijan (year-on-year growth was more than threefold), South Korea and Canada (more than a double) registered the strongest growth. As regards the countries that were the most important for Czech exports in terms of the percentage of exports, in January 2011 they included Germany (32.3%), Slovakia (8.3%) and Poland (6.1%).

Jaromír Chabr, Head of Trade and Export Finance at Komerční banka, comments on the use of the various payment security instruments by Czech traders in Slovakia at Komerční banka: “The large number of issued guarantees, which is quite stable year-on-year and traditionally ranks just after the operations in the Czech Republic and trade with Germany in terms of the pattern of countries, is evidence of the fact our clients are active, and frequently also successful, in their participation in tendering processes. The guarantees also serve as security for subsidiaries that do not have a strong capital position. On the other hand, a relatively low demand for documentary payments is felt. Given that Slovakia is the second largest trading partner for the Czech Republic, we can see that stable relationships between suppliers and customers, which have been in place for a long time, play an important role and bear out the deeply felt trust on both sides.”

The volume of incoming and outgoing payments with Slovakia grew significantly compared with the previous year, by approximately 15%. In 2010, incoming payments amounted to CZK 52.8 billion and outgoing payments amounted to CZK 37 billion. Incoming payments mainly related to deliveries of components for motor vehicles, fruit and vegetables, and deliveries in the area of transport engineering. The bulk of outgoing payments related to the energy sector, deliveries of components of motor vehicles and pharmaceutical products, and design and delivery of complete energy plants.

“The large volume of trade is related to the close interconnection between the two economies at the company level. This mainly concerns manufacturers of vehicles and their suppliers,” notes Jana Švábenská, Executive Director for Operations at Komerční banka.