Foreign trade showed a deficit of CZK 1.1 bn. in December. The deficit is only slightly different from the expected figures, therefore it should not support rally of the Czech currency from the last few days. The end of the year brings a considerable slow-down of economic activity which translates into production and export statistics. The reason for this are Christmas holidays and the end of the year and also the frequent time-off between them. The export volume in December was lower by one quarter than in November. December trade balance was weighed down by high oil prices. On the other hand, strengthening of the Czech crown resulted in decrease of most import prices, improving the foreign trade balance.
The full-year surplus is the highest in history, reflecting previous investments in production and export capacities, the peak of the economic cycle in the Eurozone and fast growth of Slovak economy.
So far this year has brought more concerns than optimism: the economy growth of the main business partners of the Czech Republic is supposed to be slowing down, the crown exchange rate is strengthening too fast and unit wage costs in the Czech Republic are not decreasing any longer. Therefore, we do not predict further increase in foreign trade surplus, on the contrary we expect a moderate decrease between CZK 70 - 80 bn. with one digit export and import growth.