Development of the balance of payments in the Czech Republic since 1993 with the emphasis on current account

Economic Annals-ХХI: Volume 153, Issue 7-8(2), Pages: 4-7

Citation information:
Drabek, J., Lipkova, L., & Gress, M. (2015). Development of the balance of payments in the Czech Republic since 1993 with the emphasis on current account. Economic Annals-XXI, 7-8(2), 4-7. https://ea21journal.world/index.php/ea-v153-01/

Jaroslav Drabek
Ing., PhD Student,
Faculty of International Relations,
University of Economics in Bratislava
1 Dolnozemska Str., 852 35, Bratislava, Slovakia
jar.drabek@centrum.cz

Ludmila Lipkova
Dr. h.c.,
Professor.,
Ing., CSc.,
Dean, Faculty of International Relations,
University of Economics in Bratislava
1 Dolnozemska Str., 852 35, Bratislava, Slovakia
ludmila.lipkova@euba.sk

Martin Gress
Dr. Ing.,
PhD.,
Associate Professor,
Faculty of International Relations,
University of Economics in Bratislava
1 Dolnozemska Str., 852 35, Bratislava, Slovakia
martin.gress@euba.sk

Development of the balance of payments in the Czech Republic since 1993 with the emphasis on current account

Abstract. Foreign trade relations have always been considered extremely important and were always attached great attention. By studying these relationships, we see signs of development or decline in the national economy. Balance of payments is recognized as a tool which provides one of the best analyses of external economic relations of a certain country. The main objective of this article is to analyze the balance of payments of the Czech Republic during 1993-2012 with an emphasis on current account and forecast of future development of the current account until 2020. We come to conclusion that the balance of payments of the Czech Republic and its specific component current account play a crucial role in the development of the Czech economy. Based on our analysis, we predict possible further deterioration of the current account mainly because of the income balance worsening. However, mentioned negative development will be counterbalanced by positive development of trade balance and balance of services. Nevertheless, these positive impacts on the current account will not be able to provide support for current account surplus achieving, which may lead to worsening of the external economic balance of the Czech Republic in medium term period.

Keywords: Balance of Payments; Balance of Services; Current Account; Czech Republic; Trade Balance

JEL Classification: C22; F32

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Received 10.08.2015