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Analysts: Foreign Trade Awakening, Car Industry Remains Driving Force
Wednesday 06 January 2010 Zoom in | Print page
Bratislava, January 6 (TASR) - Slovak foreign trade was hit hard at the beginning of 2009 by not only the forced shutdown of several export-oriented industrial companies due to the disruption of natural gas supplies from Russia but also by the precipitous slowdown of industries focusing on export markets in the Eurozone.
Economy analysts approached by TASR agreed Wednesday that this double-whammy effect last January represented the worst of times for the country in 2009.
During the course of the year, exports revived gradually, and the analysts assume that the revival of Slovak foreign trade will surely continue in 2010, since signs of slight improvement have been evident for several months. In turn, industrial production and revenues in industrial branches are starting to return to life, the analysts agree.
In large part, this picture is due to the low year-on-year comparison base and the expected improvement of our trade partners' economies. "This trend has started in recent months, when the dynamics of the year-on-year drop of exports and imports has started to disappear," said UniUniCredit Bank Slovakia analyst Lubomir Korsnak.
According to him, awakening demand of our trade partners could contribute to reviving Slovak exports. On the other hand the revival of domestic production will also increase demand for imports of the materials needed for production, explained Korsnak. This will mean that hand in hand with exports there will also be an increase in imports – reflecting higher investment activity and the import of technologies.
According to Postova Banka analyst Jana Mrvova, future development will also be influenced by the fazing out of the "impact of several anti-crisis measures introduced by countries' governments - especially the oft-mentioned scrapyard contribution (which provided savings for people who scrapped older cars and bought new ones)". The driving force of Slovak exports in 2010 will remain the car industry as well as the manufacture of electronics.
"These sectors make up approximately 40 percent of Slovak exports. On the other hand, the importance of textile and leather manufacturing industry should continue to drop," said Korsnak.
Volksbank Slovakia analyst Vladimir Vano thinks that, like in 2009, industrial branches with international business concerns manufacturing in several countries which decide to take advantage of Slovakia's euro introduction and move larger parts of their manufactures to local factories, will have the favourable position in 2010.
"Should the expected gradual revival of industrial growth in the Eurozone take place, the gradual revival of external demand will be favourable for export-oriented industry in general," concluded Vano.
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