UPDATE: Czech Trade Surplus Widens On Increased Exports

PRAGUE -- The sharp fall in Czech exports is decelerating as is the pace of the country's recession, the wider-than-expected foreign trade surplus in June showed Thursday.

The Czech foreign trade surplus widened as recent annual declines in exports and imports narrowed, with exports showing the largest improvement.

The country's June trade surplus totaled 20.43 billion koruna ($1.13 billion), up from a surplus of CZK11.71 billion in May, the Czech Statistics Office said.

The June balance was well above market expectations for a surplus of CZK16.0 billion according to a Dow Jones Newswires poll of four analysts.

"The Czech foreign trade surplus improved more than expected, which is positive news for the koruna," said Radomir Jac, chief economist at Generali PPF Asset Management in Prague.

At 0751 GMT, the koruna traded at 25.94-25.97 to the euro, slightly stronger than late Wednesday.

The trade data further indicates that the pace of recession is decelerating and this should continue this year, Jac said.

The Statistics Office added that on the year, the trade surplus with European Union member states in June was CZK41.8 billion, down only CZK1 billion on the year, which analysts said bodes well as an indication that European demand for Czech goods is recovering.

Exports were down 15.1% on the year in June at CZK185.37 billion, following a 21.2% annual fall to CZK165.02 billion in May.

Imports were 19.3% lower annually in June at CZK165.37 billion compared with a 23.2% annual decrease to CZK153.30 billion the previous month.

The Statistics Office said that imported mineral fuels were CZK6 billion cheaper in June on the year, and that was a significant contributing factor to the improved trade surplus.

The data are preliminary and the Statistics Office reserves the right to modify them at a later date.