The foreign trade surplus amounted to EUR 908mn and increased by 16.7% y/y in November, the statistical office (KSH) published preliminary data. The improvement in the external trade position was due to a continued dominance of the export performance over imports. Exports rose by 5.8% y/y, recovering from the 1.1% y/y decline for the previous month. Imports also improved but to a lower growth of 4.6% y/y in the month. We think that the difference between the export and import nominal growth should be mainly on account of favorable terms of trade developments. We suspect that the export and import dynamics might be similar in real terms, which could mean that the contribution of net exports to growth could stay in negative territory in Q4, in our view. Improving domestic demand likely drove imports up while we expect that exports continued to be weakened by the problems of the domestic car industry.
The cumulative external trade balance reached an EUR 9,452mn surplus in Jan-Nov. It expanded by 18.8% y/y. We expect that the improvement in the trade balance to gradually moderate in the near future with expiring favorable terms of trade effects, strengthening domestic demand and a weaker export growth outlook because of the car industry.