State should focus on supporting exporters-industry confederation

The state should focus more on supporting exporters, and it should extend coronavirus-related relief programmes and resume trade missions as soon as possible, Czech Confederation of Industry vice-president Radek Spicar said at press conference of state-run agency CzechTrade.

Foreign economic network should expand and Czechia should reduce its dependency on European markets and look for new territories, he said. The crisis will not end in August, which is why the Antivirus programme for boosting employment should continue, and the COVID plus guarantee programme for large export companies may need to be extended until early 2021, Spicar said.

The state should resume trade missions, first to countries that have tackled the coronavirus outbreak successfully, and open new representation offices in America, Africa and Asia, he said. A total of 31 percent of small and medium-sized exporters plan to enter new markets, while 4 percent will leave some territories and 32 percent want to focus on the domestic market, according to a recent survey of the Association of Small and Medium-Sized Enterprises (AMSP) presented by its board's deputy chairman Evzen Reitschlager at the CzechTrade press conference.

As many as 74 percent of exporters want to concentrate on their current partners, the survey showed.

Most businesses cooperate with partners in the European Union which is big enough for them and they do not feel the need to look for opportunities in remoter destinations, AMSP said. However, the strong link with Germany is a problem, as it is trying to do without foreign companies during the time of low prosperity.

A total of 70 percent of export companies registered a direct impact of the crisis, reporting a drop of 50 percent on average. The survey was conducted by agency Ipsos among 301 respondents in early June. The biggest share of respondents was from the manufacturing industry. The European Union accounts for 79 percent of Czech exports. Czechia's exports (in the cross-border concept) to the 50 most important territories fell annually by over 10 percent in March and by 35 percent in April because of the coronavirus, according to data of the Confederation of Industry.

Czechia's foreign trade ended in a Kc26.9bn gap in April, with the result worsening by Kc42.9bn year on year, according to the Czech Statistical Office (CSU). It was the worst trade balance since the country entered the European Union in 2004. Exports decreased by 40 precent to Kc191.4bn and imports fell by 27 percent to Kc218.3bn.

Source: ČTK