The foreign trade balance has reached a high surplus in recent months due to growing exports, while imports are growing more slowly. Last year's surplus is likely to exceed 2019, when the full-year decline in imports outweighed the decline in exports. However, the Czech koruna is now affected by positive sentiment on global markets rather than macro data.
The Czech Republic's foreign trade ended in November with a surplus of CZK32.2bn, which represents a year-on-year improvement of CZK20bn. This was slightly above the average expectations and slightly below our estimate. It is still true that the growth of exports significantly exceeds the growth of imports, which is why we have seen high trade surpluses in recent months. In a month-on-month comparison, exports lagged slightly behind imports this time, but even so, their year-on-year growth of 8.1% remains well above imports of 2.1%. This development corresponds with the growing foreign demand and therefore the higher activity of domestic exporters and exporters. Yoy growth in car exports accelerated to 8.7% in November. Slow imports, on the other hand, are associated with weaker domestic consumption and lower investment activity. Lower oil prices also contribute to lower imports.
From September to November alone, the Czech Republic's foreign trade surplus amounted to almost CZK100bn. The December data will probably not fundamentally change the story, and last year's foreign trade surplus would thus reach more than CZK170bn. This would be an improvement of about 30bn compared with 2019. It should be recalled that this will mainly be due to an annual decrease in imports of more than 7%. Exports fell more slowly, about 6%.
From the point of view of the koruna, these are favourable data; however, the question is rather further development in the light of other waves of the pandemic. The koruna is now recording overall global sentiment rather than domestic developments.
Economic and Strategy Research