However, domestic export is now facing several obstacles such as labor shortages and limited capacity of the Czech economy including insufficient transportation and logistics services. Also, the export industry will slow down at the beginning of next year, claimed the Exporters’ Association and Raiffeisen bank at their joint press conference.
According to the association, export results of July have restored the hope to outperform last year´s record, but the main factor will be whether the koruna will strengthen significantly after raising the interest rate.
“An alarming signal is that export of passenger cars has fallen by almost six percent in seven months,” added Otto Daněk, Deputy Chairman of the Exporters´ Association.
Uncertainty about Brexit has already begun to have an impact; both the export value and the United Kingdom’s share of Czech exports are falling. Exports of Czech companies to the UK declined by 3.8 percent to CZK 121 billion from January to July. On the contrary, the US trade war with key trading partners or Turkey’s economic and political problems have so far no impact on Czech export figures.
However, the revival of exports in the last quarter will be only temporary, and at the beginning of next year Czech exports will slow down. German leading indicators show the worst figures over the last five years. Germany is the largest trading partner of the Czech Republic. Declining exports to Germany by a tenth would lead to a fall in total domestic exports of CZK 138 billion.
In the first seven months of 2018, Czech exports grew by 1.4 percent to CZK 2.5 trillion in total.