Analysts: Czech trade surplus will fall this year

Prague, Feb 8 (CTK) - The Czech Republic's foreign trade surplus will probably fall moderately this year after 2009's record figure, analysts polled by CTK Monday said.

Foreign demand should grow this year, bringing new orders to Czech industry and services, while domestic demand will probably still stay at a low level, so a growth in imports would be pulled mainly by higher prices of materials.

Czech foreign trade ended with a record Kc153.2bn surplus last year, Kc85.9bn higher than in 2008. In December, there was a Kc2.8bn surplus, a year-on-year improvement by Kc11.9bn, the Czech Statistical Office (CSU) announced Monday.

"We expect only a bit lower full-year surplus this year than last year. Export demand will further be accelerating, while domestic demand will probably stay subdued for most of the year. Growth in imports will thus be pulled mainly by higher prices of materials. We expect a more significant revival of domestic demand and thus a bigger fall in trade surplus only next year," said UniCredit Bank economist Patrik Rozumbersky.

"We expect another surplus in 2010 - at around Kc110bn, but there will be no new record," Raiffeisenbank analyst Helena Horska forecast, adding that prices of oil and gas will not be improving the trade balance this year as was the case in 2009.

"Revival of western economies will bring new orders for the Czech industry and services. On the other hand, Czech households will reduce consumption in a more significant way and less consumer goods will therefore be imported. Investments of companies will stay weak and imports of machinery and equipment will not be increasing much, either. Imports of semi-finished products and materials for the Czech industry to consume will rise, however," she said.

Jan Vejmelek of Komercni banka expects a Kc100.7bn trade surplus this year.

"A certain revival of foreign demand this year may bring higher exports, but partial raising of inventories will be a problem as it will raise imports by 7.5 percent after an 18.1 percent fall seen last year," Vejmelek said, adding that the commodity balance will probably be deteriorating also in the coming quarters due to higher prices of commodities.

"For the whole of this year, we expect the balance to worsen to Kc90bn - Kc100bn, there is a space for a downward surprise and a potential revival of fixed investments would be seen in higher imports," Ceska sporitelna analyst Martin Lobotka added.