Growth in Czech exports third fastest in world last year

Exports from the Czech Republic grew at a rate above analysts' expectations in 2004. In fact, a new study carried out for the OECD shows the growth in Czech exports was the third fastest in the world last year, behind only China and South Korea. Other new European Union states also showed strong export growth rates, but none matched the success of the Czech Republic in this area. I spoke to Petr Sklenar, an analyst with Atlantik Financial Markets, and began by asking him what was behind this positive trend.

Photo: European Commission

"I think the key factor was EU accession, because that did away with many barriers for Czech exports - I mean administrative barriers like tariffs and so on, or economic tariffs. It helps Czech firms to place their products on western competitive markets, especially in Germany."

But other countries also joined the EU last year on May 1 - why has the Czech Republic done better than, for instance, Slovakia or Poland?

"It's because of the condition of domestic industry. Domestic exporters or producers are more competitive than others, especially in Slovakia, or Hungary or Poland, because in the last few years the Czech Republic was influenced by a massive inflow of foreign direct investment."

Is the growth in the rate of exports partly because Czech exports were low before? Were they starting from a low point?

"No, no. The volume of Czech exports was higher than in the other countries. I think the fact is that Czech producers are better or more competitive than for example Slovak or Polish or Hungarian producers."

May 1 is the anniversary of Czech accession to the EU. In the last year we've seen a high rate of growth of exports - can that possibly continue?

Photo: European Commission

"We cannot expect such a big increase, because at the beginning - I mean one year ago - there was a hole or room for increase. Part of this, or most of this room has been filled."

This growth in the rate of exports is obviously very good news for the Czech Republic. Will it have much of an impact on the economy as a whole?

"Yes. The current growth in the Czech Republic is mainly driven by exports, or the increase in exports. So we can say that a further increase in exports will positively influence the whole Czech economy."