Foreign trade came in with a deficit of CZK 1.1bn. in December. The deficit is only a little different from the expected figure, therefore it shouldn't provide any further support for the rally in the Czech currency, which has been seen in the last few days. The end of the year brings a considerable slow-down in economic activity, which is visible in both production and export statistics - the reason being Christmas holidays and year-end and frequent holiday-leaves. The volume of exports in December was 25% lower than in November. December's trade balance was weighted by high oil prices. On the other hand, the strengthening of the Czech crown resulted in a decrease in 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 top of the economic cycle in the eurozone and the fast growth of the Slovak economy.
This year has brought more concerns than optimism so far: the economic growth of the main business partners of the Czech Republic should slow down; the crown exchange rate is strengthening too fast and unit wage costs in the Czech Republic are not decreasing any more. Therefore, we are not looking to see any further increase in a Czech foreign trade surplus; rather, we expect to see a moderate decrease of between CZK 70-80 bn. with single digit growth in both exports and imports.