Aug. 4 (Bloomberg) -- The Czech Republic's trade surplus increased in June as the koruna's record appreciation against the dollar and euro helped cap imports.

Exports exceeded imports by 13.9 billion koruna ($905 million), compared with a surplus of 9.2 billion koruna in May and 8.1 billion koruna a year ago, the Prague-based statistics office said on its Web site today. The median by seven economists surveyed by Bloomberg forecast a 9.5 billion-koruna surplus.

The koruna, the world's best-performing currency this year advancing 17 percent against the euro and was 33 percent stronger against the dollar, contained imports even at a time of record oil prices. The currency's sustained appreciation lowers the chances that the country, which has benefited from European Union entry since May 2004, will improve a record full-year trade surplus for a fourth time as it begins to weigh on exporters.

``More interesting than the balance will be the pace of export and import growth,'' Radomir Jac, chief economist at Generali PPF Asset Management AS in Prague, said prior to the release. A continued slowdown of exports and imports ``will undermine domestic demand, helping curb Czech economic growth to 4 percent this year and next from 6.6 percent recorded in 2007.''

Exports rose an annual 1.7 percent, to 215.8 billion koruna and imports totaled 201.9 billion koruna, a 1.1 percent decline in the year.

Exporters, including Volkswagen AG's Skoda Auto, took advantage of the koruna's drop against the euro in the first half of last year to shelter against the currency's appreciation. Demand for Czech goods in Western Europe is waning with the hedging contracts expiring and the economy of the euro region, the crucial Czech trading partner, showing signs of a slowdown.

The first-half surplus totaled 64.4 billion koruna, a 7.1 billion-koruna increase from a year earlier.

To contact the reporter on this story: Marketa Fiserova in Prague mfiserova@bloomberg.net

Last Updated: August 4, 2008 03:05 EDT