February’s external trade statistics left January’s disappointment behind when they printed a sound surplus of CZK18bn and thus surprised the markets on the upside. Yet, the surplus was still lower than a year ago as the trade balance with cars deteriorated in particular. Commodity prices also played a role. For the remainder of the year, we expect external trade to keep printing a positive balance but still lower than last year.
The trade balance printed a surplus of CZK18bn in February. This surprised the markets on the upside, and they appraised it with modest CZK appreciation. Compared with last year, the surplus decreased CZK2.9bn. The trade balance with cars dropped CZK1.7bn. While demand for smaller cars is weak, there are production constraints regarding the production of bigger cars. Higher commodity prices also played a role as commodities are imported to the Czech Republic.
The trade dynamics significantly slowed in February. According to the Czech Statistical Office (CZSO), exports dropped 3.6% and imports 5%. Also, in a yoy comparison, trade printed negative figures. Imports decreased 1.6% while exports eased 0.5%. Nevertheless, these figures are affected by a strong statistical base and the appreciating koruna, which deflates the figures in nominal terms.
While the trade dynamics should accelerate, the surplus will remain below last year’s levels as imports will be boosted by strong domestic consumption and investment activity.