Czech Foreign Trade Surplus Expands More than Expected in April

PRAGUE--The Czech Republic's foreign trade surplus in April expanded more than forecast, compared with March, and was up also from a year earlier, driven by growing exports from the car and automotive parts sectors, data released Thursday showed,

The April surplus was 33.03 billion koruna ($1.68 billion), up from a revised CZK31.83 billion surplus in March and CZK20.01 billion in April 2012, the country's statistics bureau CSU said.

Analysts had expected an April surplus of CZK20.00 billion. The CSU had earlier reported a surplus in March of CZK32.35B.

"Czech foreign trade data delivered good news in terms of strong growth of exports, as well as in terms of recovery on the side of imports," said Radomir Jac, chief economist at Generali PPF Asset Management in Prague.

"This indicates that economic activity is starting to recover."

The Czech economy is centered on car exports and local car makers, including Skoda Auto AS, the local unit of Volkswagen AG (VLKAY). All local car makers have been battling with weak demand for cars in Western Europe. However, Skoda officials earlier predicted their sales would pick up as the company started to launch new and revamped models from March.

Thursday's trade surplus data may bode well for the local economy as it emerges from a long recession stretching back to late 2011 that was triggered by an economic contraction in the euro zone in the wake of the debt crisis.

Local exports rose 6.4% in April, rebounding from a series of monthly declines since the start of the year. Imports in April were up 1.3%, also recovering from several months of decline.

The Czech central bank still expects low inflationary pressures and has pledged to leave its benchmark interest rate at its current record low of 0.05% for as long as necessary.

Write to Leos Rousek at [e-mail]