SLOVAKIA’S latest foreign trade figures have surprised the markets, with the Statistics Office reporting a trade surplus of €49.4 million for July. Market watchers had been expecting red numbers: the office had previously reported a deficit of €6.3 million in June, after four months of surpluses. Nevertheless, both imports and exports continued falling year-on-year in July.
Foreign trade significantly affects Slovakia’s small, export-oriented economy, which has been seriously hit by weaker foreign demand.
Overall exports of goods in July dropped 26.2 percent year-on-year to stand at €3.026 billion, while imports dropped 29.6 percent year-on-year to €2.976 billion, the Slovak Statistics Office reported.
During the first seven months of 2009, exports went down by 28.1 percent to €21.508 billion, while imports dipped by 29.6 percent year-on-year to €21.263 billion, the statistics authority said.
The authority also revised all foreign trade data from earlier in the year putting the June trade deficit at €37.8 million, revised upwards from €6.3 million.
“Considering the June results we had expected a deficit also for July,” Poštová Banka analyst Eva Sadovská told The Slovak Spectator. “However, this expectation has not been fulfilled since the foreign trade ended in surplus.”
Senior analyst with VÚB Banka Martin Lenko also said that July produced a surprise surplus, since a trade deficit of €61.8 million had been forecast.
According to Sadovská, the trade figures thus continued the trend set in previous months, with each month of 2009 except for January and June recording surpluses.
“For all the previous months of this year there was a 30 percent drop in both exports and imports, while exports have fallen slightly less fast than imports,” Sadovská said.
She attributed the weaker volume of imports compared to exports to the fact companies did not have to import so many components needed for production as they do during periods when they run at full capacity.
“Foreign demand, which had been over the past years one of the main drivers of the country’s economy, has during the crisis become its Achilles’ heel,” Sadovská said. “The strongly export-oriented Slovak economy has been thus affected by the weaker foreign demand.”
Sadovská added that Slovakia’s economy has been somewhat helped by measures adopted in western Europe, such as car-scrapping bonus schemes.
“We still see certain risks in what could happen after the effects of such measures evaporate,” said Sadovská.
As far as August is concerned, Lenko expects a continued slowdown in year-on-year drops in exports and imports and a positive trade balance of €97.1 million.
In the first six months of this year, Slovakia greatest bilateral trade surpluses were with: Germany, at €729.2 million; France, at €676.6 million; and Austria, at €532.6 million. Surpluses were also recorded in trade with Poland, Italy, the Netherlands and Great Britain, the SITA newswire reported.
In contrast, the country’s deepest bilateral trade deficits were with: South Korea, at €1.231 billion; China, at €869.5 million; and Russia, at €825.2 million. Deficits were also recorded in Slovakia’s trade with Japan, Taiwan, the United States and Malaysia.
Exports of passenger cars and other motor vehicles designed for passenger transport dropped by €2,064.8 million, while exports of TV sets grew the most, by €184 million. Exports to Germany decreased 30.6 percent, to the Czech Republic by 29.6 percent, and to France by 12.6 percent. Exports to EU countries slumped by 28.5 percent, but still made up 85.4 percent of Slovakia’s total exports, according to SITA.
Six months into this year, Slovakia imported goods and services worth €18.287 billion, representing a year-on-year drop of 29.7 percent. The deepest fall was reported in vehicle parts, components and accessories, by €900.4 million.
By country, imports in the first half of this year dropped most significantly from Germany and Russia, 44 percent each, and the Czech Republic, by 24 percent. Imports from all EU countries went down by 29.9 percent, and constituted 67.3 percent of the overall imports in the monitored period, SITA reported, quoting Statistics Office data.