Britain is fourth most important destination for Czech exporters
Britain’s decision to leave the EU has raised concerns among Czech companies with business interests in the country. Britain is the fourth most important destination for Czech exporters and the second counting re-exports. It is also one of the biggest foreign investors in the country. Nevertheless, analysts say the impact of Brexit on the Czech economy should not be severe and will be mostly indirect.
The leading export articles to Great Britain are cars and car parts, electronic equipment for data processing, monitors, electric appliances and toys. Last year Skoda Auto sold over 70,000 vehicles to Britain, with Skoda voted the most reliable car brand in the UK. British imports to the Czech Republic are smaller, amounting to 73 billion crowns last year. The main import articles are pharmaceuticals, cars and engineering products.
According to the Czech Industry and Transport Union the threat of a significant drop in trade in the wake of Brexit is unlikely since, like the Czech Republic, Britain’s exports are also largely EU-oriented and the country will strive to maintain them as well as maintaining imports from EU member states on which it has become dependent. What companies may see after Britain’s departure from the EU are higher administrative costs.
Longer term, the impact of Brexit on the Czech economy is mostly indirect. The likely British recession would have a bigger impact on economies like Germany which, in turn, would have a knock-on effect on the Czech Republic.
And finally there may be a short-term impact on tourism. After the fall of the pound the Czech Republic may become a less attractive travel destination for British tourists.
