Prague 10th December (CTK) – The Czech foreign trade surplus this year will be lower than was originally expected, and should be in the range of 70 to 90 billion crowns. Deputy Minister of Industry and Trade, Martin Tlapa stated this today said to the news media. Foreign trade ended in October with a deficit of close to four billion crowns, which represents a year-on-year deterioration of 12.1 billion crowns and, at the same time, the largest negative annual change since the year 1994. These figures, according to analysts, brought the first clear indication that the economic crisis has already reached the Czech Republic.
“The Czech foreign trade surplus will probably be lower than was expected. It will not be 100 billion crowns, but it will be somewhere around the figure of last year’s surplus, that is within the range of 70 to 90 billion crowns,” Tlapa said. Due to the global financial crisis a diminished surplus is also predicted by the analysts. For example, David Marek of the Patria Finance Company anticipates for this entire year a decline in the foreign trade surplus to 75 billion crowns following on last year's surplus of 88 billion CZK.
Next year, despite the positive effects of the start-up of operation of the Hyundai automobile factory in North Moravia, and of significantly lower prices for oil and gas, the foreign trade surplus may, according to some analysts, forfeit 30 billion crowns. The Ministry of Industry and Trade, according to Tlapa, does not yet have a forecast prepared for the development of foreign trade during the next year. “But I think that the balance will finish up with positive numbers,” observed Tlapa.
A number of domestic companies, in connection with the financial crisis and the loss of export orders, are undertaking economising strategies, in most cases a reduction in staffing and a significant reduction of production. Some companies have already reported bankruptcy.
The Ministry of Industry and Trade, according to Tlapa, has prepared a package of measures for increasing support for domestic exporters in these times of crisis, while important supporting roles are being played by the Czech Export Bank, the EGAP export insurance company and the CzechTrade agency for the support of trade. The Ministry of Industry and Trade, together with the Ministry of Finance, will be publishing these measures on Thursday.
“The debate revolves around whether the EGAP should increase the percentage of insurance, which means the guaranteeing of credits for insurance, which they grant, in order to lessen the costs of insurance for production risks and for the insurance of investments. This is one area of activity, which will be set forth in this material,” Tlapa said.
The EGAP insurance company should also be introducing new products in the area of insurance of small and medium-sized companies. Additionally the Czech Export Bank is preparing to increase support for exporters, for which reason it will also be increasing its authorised capital. The participants in this package of measures should also include the CzechTrade agency, which, according to Tlapa, may, for example, alter the parameters of their client-base, in which small and medium-sized companies currently prevail. "It will be essential to assist in the reduction of costs for acquisitions abroad by medium-sized and larger companies," Tlapa observed.
The CzechTrade agency, according to Tlapa, can additionally also assist domestic firms in seeking those financial resources that are released by governments of other countries for support of their own economies. The Ministry of Industry and Trade wishes to assist exporters in achieving a more rapid release of moneys from EU funds and will offer them the possibility to also draw favourable export credits through the commercial banks. The state will also give greater support for the participation of domestic enterprises at foreign trade fairs and will expand the services of commercial counsellors abroad.