Illustrative stock photo (source: Sme)
The surplus of Slovakia’s foreign trade continues increasing. While the total export of goods amounted to €6.1087 billion in June, up by 2.1 percent year-on-year, the total import of goods grew by 0.6 percent annually to €5.5933. As a result, the foreign trade balance was in surplus, amounting to €515.4 million, which is by €92.4 million more than in June 2015, the Statistics Office data show.
The total exports of goods over the first six months of 2016 increased by 3.5 percent y/y to €34.6677 billion and the total imports by 3.4 percent y/y to €32.3596 billion. The foreign trade balance was in surplus in the amount of €2.3081 billion, up by €129 million y/y.
The foreign trade surplus is at its highest since September 2014, Ľubomír Koršňák, analyst with UniCredit Bank Czech Republic and Slovakia, wrote in a memo.
On the other hand, the Statistics Office revised the foreign trade surplus in previous months and lowered it by €87 million. The 12-month foreign trade surplus in June went up from the revised 4.2 percent of GDP to 4.3 percent, he added.
Following the base effect, the dynamics of the annual growth in both imports and exports slowed down in June.
“But the look at the monthly development of turnover in foreign trade is slightly more positive and indicate that the exports will keep growing, especially thanks to an increasing automotive industry that benefits from restored demand for new cars in the ‘domestic’ European market,” Koršňák wrote in his memo.
While the exports grew by 3.2 percent month-on-month in June, according to the UniCredit Bank calculations, their annual growth dynamics slowed down from 9.9 percent to 2.1 percent.
Despite the increased volatility this year, exports keep growing with the growth dynamics increasing in the second quarter of the year, both quarter-on-quarter and on an annual basis. Though the structure of exports in June is not available yet, it is possible that the automotive industry is the strongest, like in previous months, Koršňák said.
As for the imports, they rose by 2.9 percent m/m, according to UniCredit Bank’s calculations, though their growth dynamics dropped significantly from 7.2 percent to only 0.6 percent. Similarly to exports, there is increased volatility, likely caused by industrial supplies for production which responds to the needs of producers/exporters, the analyst added.
While last year and in the beginning of 2016 the foreign trade surpluses were not as significant, the situation changed in the 2Q and they started increasing, from 3.9 percent of GDP in March to 4.3 percent in June.
One of the factors is the revival of foreign, especially European demand, as well as lower investment imports, Koršňák said.
“Unlike previous quarters, we expect that net exports will not lower the GDP growth,” he added.
As for the coming months, Koršňák expects the foreign trade surplus will continue increasing and stabilise at 4.5-4.7 percent of GDP.
