Trade balance (Aug): CZK 16.9bn
Consensus: CZK 15.8bn
Previous (Jul): CZK 24.3bn
Trade balance surplus declined in August due as expected following its typical seasonal pattern. Compared to data a year ago (CZK +1.2bn), it has significantly improved. Exports grew by 7.9%, imports only by 0.8%, both yoy. Solid export performance stems from a tight connection to the German economy. While other Euro zone countries suffer from a lack of competitiveness, Germany managed to keep rising exports even in current environment. Data released today morning showed that exports from Germany rose by 2.4% mom, beating expectations of decline by 0.5% mom. However, an outlook for coming months is less positive as new foreign industrial orders decreased. Feeble imports reflect sluggish domestic demand. Imports rose only by 0.8% yoy despite a surge in oil prices. Lower imports of investment goods point to further decline in investment activity in Q3. Net exports are likely to bring a positive contribution to GDP growth in Q3, but negative development of household expenditures, government spending and fixed capital formation will outweigh. In 2012, the trade balance is forecasted to reach a surplus of CZK 310bn after CZK 191bn in 2011.