External trade - 2. quarter of 2006

 

In external trade ¹ in the 1 ^st half of 2006, the trend of exports growing faster than imports was interrupted. This trend continued since the 2nd half of 2001 (according to half-yearly data).
In 1 ^st half of 2006 compared to 1 ^st half of 2005:
- growth of exports fell behind the growth of imports by 0.9 percentage points. The growth rate of exports and imports accelerated, compared to the 1 ^st half of 2005. Dynamics of exports and imports were high and reached two-digit values – exports 12.9% and imports 13.8%. Increases were mainly affected by the development in Q1 2006, where exports increased by 17.5% and imports by 18.2% year-on-year, in Q2 2006 exports were higher by 8.7% and imports by 9.8% year-on-year. External trade turnover was higher by 13.3% i.e. by CZK 237.2 billion and amounted to CZK 2 019.8 billion; the contribution of exports, which rose by CZK 117.2 billion, to the turnover made up 49.4%, the contribution of imports, which was higher by CZK 120.0 billion, represented 50.6%. Under the influence of appreciation of CZK against EUR, exports and imports in EUR grew faster (by 19.1% and 20.1%, respectively), slight appreciation of CZK against USD led to growth of exports and imports in USD (by 14.1% and 15.1%, respectively);
 
External trade in the Czech Republic had a more favourable development in comparison to that of the EU25 member states as a whole; compared to the new EU member states the dynamics of external trade in the Czech Republic was similar. Data released by Eurostat on 19 July 2006 available for January-April 2006 show that EU25 exports and imports in EUR were up by 13.1% (EU15 +12.5%) and 14.5% (EU15 +14.1%) year-on-year respectively on average in this period. Exports and imports of 10 states which became members of the EU from 1 May 2004 were by 19.9% and 19.4% respectively higher year-on-year on average. In the same period the share of these 10 states in total EU25 exports increased from 7.5% to 8.0% year-on-year and their share in total EU25 imports reached 8.5% (8.2% in the same period of 2005). In January-April 2006 external trade balance of the EU25 reached a deficit of EUR 21.9 billion (of which the EU15 deficit EUR 13.3 billion and the 10 new member states deficit EUR 8.6 billion). The Czech Republic recorded an external trade surplus as the only one among the new EU member states.
 
- external trade surplus was lower by CZK 2.8 billion (coverage of imports by exports decreased from 104.3% to 103.5%). Trade balance, which was active in all months of the 1 ^st half of 2006, reached a surplus of CZK 35.1 billion. The balance of external trade by group of countries worsened in relation to other states ² , CIS ³ and developing economies; in terms of the commodity structure, it was worse in all SITC sections except machinery and transport equipment where the surplus increased year-on-year. The deficit of trade in mineral fuels, lubricants and related materials grew markedly;
           
- by group of countries, states of the EU25 had a weakening share in the total exports and imports. In spite of this, the EU25 states, with their share of 83.8% in total exports and 70.3% in total imports, played a key role in the external trade of the Czech Republic. A favourable aspect was a higher share of CIS countries, European transition economies and developed market economies outside the EU25 ⁴ in total exports. In imports, the shares of developing economies and developed market economies outside the EU25 dropped; the position of CIS countries and other states strengthened significantly, slightly also the position of European transition economies;
- in the commodity structure growth was apparent (although significantly different) in exports and imports in all sections of SITC. A highly above-the-average increase (which determined the dynamics of total exports) was seen only in exports of machinery and transport equipment leading to the strengthening of their position in total exports from 50.1% to 52.9%. The growth of exports created a higher surplus of trade in these products by CZK 34.4 billion. The remaining sections of SITC had a below-the-average growth, which showed itself in a decrease of their share in total exports. Above-the-average increases in imports were recorded for crude materials, inedible, and mineral fuels, and machinery and transport equipment. These sections of SITC raised their share in the total imports at the expense of all the other SITC sections. Crude materials, inedible, and mineral fuels concentrated the biggest external trade deficit (CZK 71.9 billion), deficit of trade in chemicals and related products remained the second highest (CZK 43.8 billion).
 
Development of external trade (trade balance) in the 1 ^st half of 2006 was influenced by both positive and negative effects.
Among the positive effects were in particular:
- the continuing growth of industrial production. In January to May 2006 the industrial production index reached 112.3, of which in manufacturing 113.6. The biggest year-on-year increase was recorded in manufacture of transport equipment followed by manufacture of electrical and optical equipment. The growing output of manufacturing had a decisive share in the year-on-year growth of total exports. Exports of manufacturing ⁵ in the 1 ^st half of 2006 reached CZK 991.2 billion, increased by CZK 113.2 billion year-on-year and their share in the year-on-year growth of total exports was 96.6%.
The most important item of exports of manufacturing was road vehicles (SITC 78) with a year-on-year growth of exports by 23.6%. The share of exports of road vehicles in the total exports in the 1 ^st half of 2006 was 18.4% (16.8% in the 1 ^st half of 2005), of which motorcars (SITC 781) made up 9.8% (8.4%) and parts and accessories of the motor vehicles (SITC 784) 7.3% (7.2%). To the increase of total exports motorcars contributed with nearly 21% and parts and accessories of the motor vehicles with almost 8%. The surplus of external trade in motorcars grew from CZK 54.0 billion in the 1 ^st half of 2005 to CZK 78.1 billion in the 1 ^st half of 2006 and in parts and accessories of the motor vehicles from CZK 28.3 billion to CZK 29.5 billion. Among other important products of mechanical engineering, a high growth (43.7%) was recorded for exports of office machines and automatic data-processing machines (SITC 75), which raised the surplus of these products by CZK 5.6 billion;
- acceleration of the economic growth worldwide and mainly in the EU states. According to the second estimate made by the Eurostat on 12 July 2006, GDP of the Euro-zone increased in Q1 2006 by 2.0% year-on-year and of the EU25 by 2.2% (in Q1 2005 by 1.7% and 1.9% respectively). The GDP of the main EU trading partners – the United States and Japan was up by 3.7% and 3.5% respectively year-on-year in Q1 2006.
 
Among the negative effects were in particular:
- unfavourable terms of trade ⁶ figures. Export prices dropped by 2.1% in January to May 2006 compared to the corresponding period of the previous year and import prices were higher by 2.3% ⁷ in the same period. The fluctuation of external trade prices was mainly influenced by the development of prices on the world market and by the strengthening of CZK against EUR by 5.5% on average and against USD by 1.0% on average. The world prices of industrial raw materials and food grew by 34.6% ⁸ ; this growth was heavily influenced by the prices of petroleum and natural gas, which rose by 36.5% year-on-year in total. Just the higher prices of petroleum and natural gas had an unfavourable impact on the trade balance and considerably decreased the surplus. In the 1 ^st half of 2006 external trade deficit of petroleum, petroleum products and related materials reached CZK 51.2 billion and was higher by CZK 14.5 billion year-on-year and of gas, natural and manufactured CZK 33.6 billion, which increased by CZK 9.8 billion year-on-year. A predominating influence (almost 9/10) on the increase in the trade deficit of petroleum, petroleum products and related materials was the growth of prices. The rise in the deficit of trade in gas, natural and manufactured was entirely caused by the growth of prices;
 - a continuing (even though for various reasons) rise of the already high trade deficit with China (from CZK 35.9 billion to CZK 48.4 billion) and with Russia (from CZK 32.7 billion to CZK 44.8 billion).
 
A more detailed look at the external trade development in the 1 ^st half of 2006 shows that:
 
- exports grew to all the main groups of countries. Above-the-average dynamics were apparent (except exports to the EU25 states and developing economies) for exports to CIS countries, European transition economies, other states and developed market economies outside the EU25. The prevailing part of the absolute increase of total exports (76.1%) was (although under the below-the-average growth) realized by the increase of exports to the EU25 states by CZK 89.3 billion. A favourable development was also observed in exports to developed market economies outside the EU25 (mainly Switzerland, Norway, Japan and Canada). The growth of exports to the EU25 reflected various dynamics of exports to individual states. Exports to the majority of states recorded above-the-average growth (e.g. The Netherlands, France, Belgium, Hungary, Italy, Poland, Sweden, Spain and the United Kingdom), less dynamic were exports to Slovakia and in particular to Germany (where the absolute growth of CZK 15.9 billion belonged, however, to the highest), and decreases continued for exports to Austria. As to other states, worth mentioning are higher exports to the Ukraine, Russia, Romania and Hong Kong;
- imports were higher from all the main groups of countries. An above-the-average growth was reported for imports from other states, CIS countries and European transition economies; imports from developed market economies outside the EU25 and particularly from developing economies were below the average. Dynamics of imports from the EU25 were more moderate and varied considerably from one EU25 state to another; the absolute growth of imports by CZK 73.1 billion however represented nearly 61% of the growth of total imports. Highly above-the-average increases were recorded particularly for imports from Poland, then from France, the Netherlands, Hungary, Slovakia and the United Kingdom, below-the-average growth was apparent e.g. for imports from Germany, Italy and Austria, a decrease was recorded for Sweden. As to imports from other states, higher imports from Russia, China, Norway, Romania, Japan and Taiwan and a drop of imports from the United States should be mentioned;
- the external trade balance resulted from surplus of trade balance with the EU25 states (CZK 163.3 billion) and with European transition economies (CZK 17.5 billion) and from deficit of trade with developed market economies outside the EU25 (CZK 27.1 billion), developing economies (CZK 17.0 billion), CIS countries (CZK 51.8 billion) and other states (CZK 49.3 billion).
            The surplus was higher in trade with the EU25 states by CZK 16.2 billion and with European transition economies by CZK 3.6 billion year-on-year. Increases of the deficit with developing economies made up only CZK 0.8 billion, with CIS countries CZK 12.5 billion and with other states CZK 12.6 billion. Increases occurred particularly in surplus with France, Belgium and the United Kingdom, a turn of the deficit into a surplus improved the trade balance with Sweden and Italy and on the other hand a turn of the surplus into a deficit worsened considerably the balance with Poland. Surplus decreased in trade with Slovakia, Austria and Germany, with whom however the surplus reached CZK 44.0 billion. As to further states, a high deficit, which rose year-on-year (as mentioned above), was registered in trade with Russia and China, deficit in trade with Japan and Taiwan also increased, and balance with the United States and the Ukraine improved.
 
Changes in the commodity structure of external trade in the 1 ^st half of 2006, compared to the corresponding period of 2005, were noticeable in:
 
- machinery and transport equipment by highly above-the-average growth of exports and hence an increase of their share in total exports. Higher exports by CZK 88.1 billion represented a 75.1% increase of total exports. Imports of machinery and transport equipment recorded a second highest relative growth and the highest absolute increase (by CZK 53.7 billion) among all the SITC sections and a strengthening of the position in total imports from 39.4% to 40.1%. External trade surplus of machinery and transport equipment reached CZK 146.3 billion and grew by CZK 34.4 billion year-on-year. This surplus was mainly contributed to by exports of motor vehicles and computer technology. Surplus was up in trade in motor vehicles by CZK 26.2 billion and office machines and equipment improved (a turn of the deficit CZK 3.9 billion into surplus CZK 1.2 billion);
- manufactured goods classified chiefly by material by below-the-average dynamics of exports and also of imports and hence weakening of their position in total exports (from 22.6% to 21.2%) and in total imports (from 21.3 % to 20.6 %). Surplus of external trade in these goods decreased year-on-year (from CZK 20.0 billion to CZK 13.2 billion). This drop was mainly affected by the increase in the deficit of trade in non-ferrous metals (from CZK 13.4 billion to CZK 20.6 billion);
- miscellaneous manufactured articles, commodities and transactions not classified elsewhere in the SITC by a slight decrease of surplus (from CZK 10.0 billion to CZK 9.3 billion) due to lower growth of exports than of imports. Surplus of trade with furniture and parts thereof decreased by almost CZK 1 billion and deficit of trade in articles of apparel and clothing accessories increased by CZK 1.7 billion;
- chemicals and related products by below-the-average dynamics of exports and imports. Deficit of external trade in these products rose by CZK 2.2 billion. The biggest deficit kept concentrating into medical and pharmaceutical products (CZK 16.4 billion), however, it was by CZK 0.7 billion lower year-on-year. Deficit increased from CZK 5.9 billion to CZK 7.2 billion in trade in plastics in non-primary forms;
- crude materials, inedible, and mineral fuels by the highest growth rate of imports among all sections of SITC and a more moderate growth of exports. This development, which was strongly influenced by high prices of mineral fuels, led to the year-on-year increase of deficit in this group of products by CZK 24.8 billion;
- agricultural and food crude materials and products by the lowest relative and absolute growth rate of exports among all sections of SITC. The higher growth rate of imports against the growth rate of exports showed itself in a year-on-year increase of deficit (from CZK 12.9 billion to CZK 15.6 billion).

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¹ All the data are at current prices. The 2005 data are updated referring to 30 May 2006 closing date, the January to March 2006 data are updated referring to 30 May 2006 closing date, the April 2006 data are preliminary referring to 30 May 2006 closing date, the May 2006 data are preliminary referring to 28 June 2006 closing date and the June 2006 data are preliminary referring to 1 August 2006 closing date.
² China, North Korea, Cuba, Laos, Mongolia, and Vietnam.
³ The Commonwealth of Independent States
⁴ EFTA states and other developed market economies (mainly outside Europe).
⁵ Items CZ-CPA 15 to CZ-CPA 36.
⁶ Import and export price indices in the CR are published later than data on external trade of the CR.
⁷ In the given period exports were higher by 16.1% and imports by 13.9% at constant prices.
⁸ See World Price Indices of Industrial Raw Materials and Food in June 2006, CZSO, July 2006.