Auto Sector Fuels Czech Industrial Output Surge

Last month the country's car makers raised passenger car output by 9.5% in 2010 against 2009, seeing more than a million units roll off the assembly line for the first time in history.

After two years of decline, Czech industrial output grew 10.5% in 2010 compared to 2009, driven by car production which also boosted foreign trade last year, official data showed on Feb. 7.

"The year-on-year growth was fueled mainly by the production of motor vehicles and trailers," which grew by 22.2% and added 3.5 percentage points to the growth, the Czech Statistical Office said.

Industrial output plummeted by 13.6% in 2009 over 2008.

The Association of Automotive Industries said last month the country's car makers raised passenger car output by 9.5% in 2010 against 2009, seeing more than a million units roll off the assembly line for the first time in history.

Skoda Auto, a unit of Volkswagen, TPCA, a joint venture of PSA Peugeot-Citroen and Toyota, and the local factory of Hyundai turned out a total 1,072,263 vehicles in 2010.

Car production also helped raise overall exports, which grew by an annual 17.7% in 2010 while imports rose by 20.3 %, statisticians said.

The foreign trade surplus reached 124.5 billion koruna (US$7 billion), a drop of 25 billion koruna against 2009.

"While a collapse in demand from abroad pulled the Czech economy into a recession in 2009, a revival in foreign demand last year was a major growth stimulus for the Czech economy," said Jan Vejmelek, an analyst with Komercni banka.

The Czech central bank said last week it expected 2.4% growth for 2010, following a 4.1% contraction the year before as the ex-communist country was hit by the global slump.

For 2011, the bank predicts a slowdown to 1.6% on the government's austerity steps designed to mend the country's ailing public finances, before a pick-up to 3% growth in 2012.

Copyright Agence France-Presse, 2011

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