The foreign trade generated a EUR37m surplus in August, the statistical office (KSH) reported preliminary data. The surplus represented an improvement compared to the EUR62m deficit for the same month of the previous year. Both export and import growth slowed down in nominal terms in August but export growth was higher and contributed to the improvement in the foreign trade position. Export growth decelerated to 2.6% y/y while import growth moderated to 1.3% y/y in the month.
We think that the relative strength of exports might be due to better terms of trade, which entered a positive trend recently in contrast to the developments in the first months of the year. Otherwise, the real performance of exports was likely quite subdued in August, in line with the industrial activity, on account of the seasonal difference in the holidays in the automotive industry compared to last year. We attribute the low import growth to the same factor, possibly also supported by the usual volatility in energy imports. We do not see the weak imports as a signal for slowing domestic demand, given that the underlying fundamentals remain quite optimistic for the time being.
On a cumulative basis, the external trade surplus amounted to EUR 3,326mn in Jan-Aug and declined by 22.7% y/y. The KSH should publish detailed external trade data for the period on Oct 31.