External Trade of the Czech Republic

Commentary

Contents

According to preliminary data, seasonally adjusted exports rose by 3.0% and imports fell by 7.4% month-on-month. The trend component was up by 2.4% in exports and down by 0.9% in imports (Table 6, Graphs 1 and 2). The growth rate of the trend in exports has been increasing since April 2005; the trend in imports has been on the decrease since May 2005.

In terms of year-on-year comparison, exports rose by 2.5% and imports fell by 3.5% at current prices. Due to the development of exchange rate, external trade rose faster in terms of euros (exports +7.0%, imports +0.7%); in terms of dollars, exports increased by 5.2% and imports dropped by 1.0 %.

The trade balance ended in a surplus of CZK 1.2 billion, which was a CZK 8.4 billion better result than in July 2004. This has been the first surplus ever recorded in July in the history of the Czech Republic. Trade balance with the EU member states was active by CZK 18.8 billion and with the non-EU states passive by CZK 17.6 billion. The balance improved especially in trade in ‘machinery and transport equipment’ (surplus rose by CZK 8.3 billion), ’manufactured goods classified chiefly by material’ (surplus rose by CZK 2.0 billion), ’chemicals and related products’ (deficit decreased by CZK 0.8 billion) and ‘crude materials, inedible, except fuels’ (deficit down by CZK 0.5 billion). Deficits of trade in ’mineral fuels, lubricants and related materials’ and ’beverages and tobacco’ worsened by CZK 2.6 billion and CZK 0.5 billion, respectively.

The favourable development of the balance of trade in ‘machinery and transport equipment’ (exports +4.0% and imports -9.6%) was primarily affected by marked improvements of the balance of trade in computers (by CZK 3.6 billion) and road vehicles (by CZK 3.0 billion). On the other hand, balance deteriorated in trade in other transport equipment (by CZK 0.4 billion) and in power-generating machinery and equipment (by CZK 0.3 billion).

The growth of imports of ‘mineral fuels, lubricants and related materials’ by 29.3% was mainly fuelled by higher imports of crude petroleum (+68.3% in terms of value, +19.4% in terms of volume) and natural gas (+55.4% in terms of value, +17.9% in terms of volume).
By group of countries, improvement was recorded in trade with the EU member states (surplus grew by CZK 6.1 billion) and with the non-EU states (deficit increased by CZK 2.3 billion) alike. Balance improved particularly in trade with the United Kingdom (surplus rose by CZK 2.5 billion), Japan (deficit fell by CZK 2.5 billion), Italy (deficit decreased by CZK 2.0 billion) and the United States (the CZK 1.7 billion deficit turned into a CZK 0.3 billion surplus). Balance deteriorated in trade with Russia (deficit grew by CZK 2.6 billion), the Netherlands (a deficit of CZK 0.6 billion as against a surplus of CZK 1.9 billion), Germany (surplus decreased by CZK 0.5 billion), China (deficit rose by CZK 0.5 billion) and Austria (surplus fell by CZK 0.5 billion).

Over last twelve months, compared to the preceding twelve months, exports and imports were up by 15.9% and 10.0%, respectively. The total trade balance reached a surplus of CZK 31.2 billion, which was an improvement of CZK 85.8 billion.

Trade in ‘machinery and transport equipment’ (a CZK 87.3 billion increase in surplus); ‘manufactured goods classified chiefly by material’ (a CZK 17.0 billion growth of surplus) and ‘chemicals and related products’ (a CZK 13.0 billion fall in deficit) had a favourable effect on the development of the balance. Deficits rose of trade in ‘mineral fuels, lubricants and related materials’ (by CZK 24.7 billion), ‘food and live animals’ (by CZK 3.3 billion), ‘crude materials, inedible, except fuels’ (by CZK 2.5 billion), and ‘beverages and tobacco’ (by CZK 1.9 billion).

By group of countries, surplus of trade with the EU member states grew by CZK 78.4 billion, of which by CZK 23.6 billion in trade with Germany, by CZK 17.3 billion in trade with Slovakia, by CZK 7.1 billion with Belgium and by CZK 6.4 billion in trade with Hungary. The CZK 6.8 billion deficit of trade with France turned into a CZK 9.6 surplus (mainly due to higher exports of motor vehicle parts). Surplus of trade with the Netherlands dropped by CZK 14.4 billion and deficit of trade with Switzerland grew by CZK 2.1 billion. Deficit of trade with the non-EU states rose by CZK 7.4 billion. Balance deteriorated particularly in trade with Japan (by CZK 9.5 billion), Russia (by CZK 7.4 billion) and Turkey (by CZK 3.1 billion). Trade deficit with China was down by CZK 0.6 billion.

In January-July 2005, exports and imports grew by 8.7% and 2.7%, respectively. The trade balance reached a surplus of CZK 43.2 billion, compared to the deficit of CZK 14.4 billion in the corresponding period of 2004.

The CZSO has carried out the regular quarterly update. The final data say that the trade balance for the year 2004 ended in a deficit of CZK 26.4 billion (by CZK 3.4 billion more). According to the updated figures, surplus of the trade balance grew by CZK 7.5 billion and reached CZK 26.8 billion in the first quarter of 2005; it dropped by CZK 3.4 billion and stood at CZK 15.2 billion in the second quarter of 2005. As a result, the trade balance surplus grew by CZK 4.1 billion and amounted to CZK 42.0 billion in the first and second quarters of 2005. The update was particularly affected by the correction of the misreported data on import and export of aircraft in January 2005 (CZK +6.0 billion) and by the inclusion of imported fighters Jas-Gripen in April 2005 (CZK -4.4 billion) which the CZSO announced earlier.

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According to the note of the Directorate General of Customs, data were received from 95.8% of companies obliged to report within the Intrastat system. As far as large companies are concerned (those whose annual value of exports to or imports from the EU member states exceeded CZK 100 million), the response rate was 98.8%.
Data for companies exempted from the reporting duty (those whose annual value of trade with the EU member states was below CZK 4 million for goods dispatched and below CZK 2 million for goods received) and data for companies that failed to report were imputed. The imputation methods are based on data that companies supplied in the previous period. As to the July data, the share of the imputed value was 2.9% in total exports and 2.1% in total imports.