Czech Republic enjoying record export growth

The Czech Republic has been enjoying record exports and new figures released this week show that the trend is far from over. In the first four months of this year, companies operating in the Czech Republic exported products worth 792 billion crowns (close to 37 billion USD). This is 117 billion crowns, or 17.4 percent, more than at the same time last year. The remarkable growth is mainly thanks to a revival of imports from the eurozone. But economic analysts say that neighbouring Slovakia, whose economy has been booming, is also playing an important role.

I spoke to economic analyst Tomas Sedlacek:

"Exports have been doing very well for the past years. One of the points of extreme elevation was the EU accession in 2004. We could see a large increase in exports in the preceding years, having expectations of soon entry of the Czech Republic into the EU, which later on really showed in the numbers and our exports have been growing ever since. The month of April was an extremely good month and that is also due to the large FDI [foreign direct investment] that we have seen in the last few years as companies are exporting their products back to western Europe."

Slovakia's economy has been doing remarkably well. What role does it play in the Czech Republic's exporting performance?

Photo: European Commission
"The Czech Republic and Slovakia are two very interesting countries to look at. The Czech Republic has been doing slightly better in exports. Our GDP was pulled by exports - even higher than the Slovak's exports. Another riddle that baffles economists, not only Czech but also foreign economists, is the fact that our currencies are strengthening and yet our exports are literally skyrocketing.

"As for the question of whether we can do it even better, 17.4 percent in year-on-year exports is a tremendously wonderful number. In 2004, the Czech Republic's export growth was the third largest in the whole world. So, it is a very high number and we can do even better but this result is an excellent result and we can be proud of it as it is."

So, exports can grow even faster. How do you see the future? With the government's planned reforms, do you think that exports will grow or do you think that the reforms could slow them down?

"The reforms that the government plans will not create a significant direct impact on our exports. If the reforms are passed and the vision to decrease corporate taxation to 19 percent in 2010 passes through parliament then that would make our country even more attractive for foreign investors and in that respect it would be slightly more helpful. But otherwise the exports are mainly given by the number and quality of production in the Czech Republic."