The external trade surplus amounted to EUR 601mn in August and increased by 35.2% y/y, the statistical office (KSH) reported preliminary data. The improvement in the trade balance was due to a strong recovery in export growth, matching the industrial output performance during the month. We think the figures strongly suggest that external demand mainly accounted for the industrial recovery but we are still cautious to assume that the recovery might be sustained going forward.
Exports rose by 12.5% y/y in August, which was the strongest growth since Jun 2015. The sharp acceleration should be partly on account of extra working days in August this year, as the industrial output data showed. Imports also picked up noticeably with a 10.8% y/y increase during the month, in our opinion related mostly to the recovery of export-oriented production. We think that import growth was likely boosted by price effects as well, taking into account the significant moderation of the global energy price decline in August. Accordingly, we do not read that data as a signal for significant improvement in domestic demand during the quarter. The KSH will publish detailed foreign trade figures on Oct 28.