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PRAGUE, Nov 22 (Reuters) - Weak demand in Germany and other key Czech export markets sent the EU candidate country's trade deficit soaring in October, extending the recent worsening of the trade balance.
The Czech Statistical Bureau (CSU) said on Friday that an 11 percent slump in nominal exports put the monthly trade shortfall at 18.12 billion crowns ($594 million), much worse than the 11.4 billion expected by analysts in a Reuters poll.
"An unpleasant surprise. Unfortunately we saw the exports falling rapidly mainly due to the slowdown in Germany," said Josef Kovalovsky, an analyst at bank CSOB.
"I do not expect the following months to be better. Foreign trade will be negatively reflected in GDP data for the third quarter and the latest data shows that it can be similar in the fourth quarter," he said.
The figure followed an already poor September deficit of 11.87 billion and points to the growing threat to growth which the weak EU performance poses to the highly open Czech economy.
This is paired with firming of the crown currency, mainly in the first half of this year, on the back of heavy investment inflows. The firmer crown puts pressure on exporters, mainly in highly price-sensitive areas such as textiles.
The CSU said exports of clothing slumped by 34.1 percent year-on-year, and overall manufactured goods exports dropped by 19.8 percent.
Vehicle exports dropped 4.6 percent, including a 10.1 percent drop in the shipments of cars, the country's largest export article. This documents sales troubles of VW unit Skoda Auto , the largest Czech company by turnover.
Imports fell by 4.2 percent year-on-year. The CSU said that the export and import figures looked better in euro terms, with imports rising 4.9 percent and exports falling 2.5 percent year-on-year.
While a higher foreign trade deficit points to general risks to economic performance, it does not pose any immediate threat to the financial markets, analysts said.
High investment inflows have kept the overall balance of payments safely in the black figures.
The crown dipped after the data to 30.66 to the euro from previous 30.59.