Czech Republic Reports First Trade Deficit of the Year

The Czech Republic reported a trade deficit of 5.9 billion CZK in July, down 16.6 billion CZK from the previous year. This marks the country’s first negative balance this year, with the last deficit recorded in December 2019. The deficit was mainly caused by a decline in electricity trade and an increase in the trade gap for computers, electronic, and optical devices. The Czech Statistical Office (CSU) released these preliminary figures on Wednesday.

The country’s exports decreased by 4% YoY to 318.8 billion CZK, while imports fell by 8.4% YoY to 324.7 billion CZK. This July had the same number of working days as last year. On a month-to-month basis after seasonal adjustment, exports decreased by 3.6% and imports by 1.4%.

The deficit in the trade balance for July was primarily caused by the decline in electricity trade, which decreased by 6.8 billion CZK. The gap in the trade balance for computers, electronic, and optical devices increased by 6.5 billion CZK, while the deficit in the trade balance for electrical equipment increased by 1.8 billion CZK.

However, there were also some positive factors in the trade balance. The deficit in the oil and natural gas trade balance decreased by 23.3 billion CZK YoY due to decreased commodity prices on world markets. The surplus in the trade balance for motor vehicles rose by 4 billion CZK, and the deficit in the trade balance for basic metals decreased by 3.1 billion CZK.

Despite the negative trade balance in July, the Czech Republic still maintained a surplus of 73.6 billion CZK in the first seven months of this year. This is in contrast to last year’s period, where the country posted a deficit of 108.3 billion CZK. From the beginning of the year, exports have increased by 4%, while imports have decreased by 3.1%.

The decline in trade balance for the country is a cause for concern, but it is not unexpected given the impact of the COVID-19 pandemic on the global economy. The government and businesses in the Czech Republic will need to continue to monitor the situation closely and take measures to support the country’s trade sector in the coming months.