In February, merchandise exports from the Czech Republic increased by seven percent year on year to 329.7 billion crowns. The value of imports rose by 16.5% to 334.1 billion CZK. On a monthly basis, seasonally adjusted exports fell 2.6 percent and imports declined 0.3 percent compared to January.
The balance of foreign trade with EU countries deteriorated by CZK 6.1 billion year on year in February. The trade deficit with non-EU countries widened by 19.3 billion kroner.
“Foreign trade ended with a deficit of CZK 4.4 billion in February. In recent years, the second calendar month of the year has mostly been marked by a positive trade balance,” said Stanislav Konvichka, Head of CZK Trade Balance Department in Czechoslovakia. Last February, the Czech Republic’s foreign trade showed a surplus of CZK 21.3 billion and the previous year: CZK 19.7 billion.
The February balance for this year was negatively affected by the annual decrease in the trade surplus in cars by 8.8 billion CZK, due to a decrease in exports by 8.5 billion CZK. “We are observing worse data on an annual basis for the eighth month in a row,” Konvichka noted.
In the second calendar month of this year, the deficit in oil and natural gas also deepened by CZK 8.2 billion and in base metals by CZK 6 billion. On the other hand, a rise in the trade surplus in electricity, gas, steam and air conditioning by 4.8 billion kroner had a positive effect.
Analysts: The effects of what is happening in Ukraine will be fully visible in foreign trade
The foreign trade result for February was worse than analysts had expected. Only in March will the effects of what is happening in Ukraine become fully clear. Companies are still struggling with a shortage of spare parts, and production materials are still very expensive. This problem is likely to persist. This comes from the statements of economists, addressed by ČTK today.
“The year-over-year balance was driven upward mainly due to higher electricity exports, with higher oil and gas imports, lower exports of cars and spare parts, and higher imports of base metals having a negative impact,” said UniCredit economist, Jiří Pour.
And exports improved by seven percent compared to last February. Raiffeisenbank analyst David Vagenknecht noted that the trade surplus had a negative impact on exports, indicating a weak pace of production. According to him, the fewest cars were produced in the first two months of this year since 2010. The problem is mainly missing parts.
Analysts were surprised by a 16 percent year-over-year increase in imports. “Import dynamics has caused commodity prices to rise in global markets. The trade in natural gas and oil has consequently increased the deficit to 8.2 billion kroner from 7.2 billion kroner in January,” Wagenknecht said.
According to Tomas Wolf of Citfin, the other bad news for foreign trade is the result of orders from companies in Germany, which is the strongest trading partner of the Czech Republic. “In the same month, i.e. in February, (orders) declined by 2.2 percent on a monthly basis and returned to the red zone after three months,” he said.
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