Trade balance in June scored much lower deficit than was expected. While the market expected a CZK 10.5 bn deficit (Patria being even more skeptical with a CZK 13 bn deficit forecast), the actual figure reported by the Czech Statistical Office was CZK 5.8 bn. The main reason behind the lower-than-expected deficit is a rapid slowdown of imports' growth from average 20% in first five months of 2001 to mere 2% in June.
Such a rapid slowdown was not expected and is difficult to interpret. While the households' demand has been growing slowly but steadily by 3-4%, the investment demand has been booming lately, with investment rising by 6-7%. In June, imports of mineral fuels shrank by 8% in real terms (prices of oil fell by 2% y-to-y in the same period). Significantly, exports of machinery (now almost 50% of Czech exports) rose by healthy 13%, while imports of the machinery rose by less than 5% in the same period.
We have to wait for another month results whether they will confirm the June import slowdown or whether they will render it as a mere statistical exception.
(Ondrej Schneider)