After the preceding recession, Czech producers were unable to satisfy the increasing local demand at the beginning of a phase of growth, and 1994 was marked by a rapid increase in imports, while simultaneously export growth slowed, because a portion of the goods originally meant for export was sold internally. The result was a balance of payments deficit which has accompanied the economy's development ever since, and is still growing. Of these countries, the members of the EU are our most important trading partners, and first place is occupied by Germany. Czech foreign trade is characterised by its marked concentration of trade relations not only on European countries in general, but in the main on our neighbours. As far as groups of products in which the Czech Republic trades are concerned, it is interesting that a major change in the structure of both imports and exports only occurred during 1996.
Imports are a little more diversified.
In relation to the characteristic features stated we should also pay attention to the balance of payments and to the dynamism of foreign trade. For more than two years now, the foreign trade of the Czech Republic has been in deficit. The main source of the foreign trade deficit is the higher value and dynamism of imports against exports. In contrast, Czech exporters failed to increase sales of goods to countries with advanced economies in the first 11 months of 1996 because the demand for foreign products was still small and competition in the markets of those countries had grown stronger. These questions are fundamental and would deserve a special treatment.