INSTANT VIEW 2-Slovak trade swings to surplus in Jan

...revised gap of 12.31 billion crowns in December, 
the Statistics Office said on Wednesday. 
 
KEY POINTS: 
FOREIGN TRADE         JAN 07    DEC 06    JAN 06    JAN-DEC 06 
 (SKK bln) 
 Balance              +3.982   -12.306    -8.191     -91.627 
 (Full table of data...........................[ID:nPRG000266]) 
 
- The market had predicted a trade deficit of 2.0 billion crowns 
in January, according to a Reuters poll of analysts. 
- The Statistics Office did not release a more detailed 
breakdown of January trade data. 
- The December balance was revised from a previously reported 
shortfall of 12.48 billion crowns. 
 
ANALYST COMMENTS: 
    MIROSLAV PLOJHAR, CHIEF ECONOMIST, CITIBANK, PRAGUE 
    "It is very positive news for the economy and the Slovak 
crown. It seems that an increase in car industry exports is 
finally starting to be reflected in the figures. 
    "I expected an interest rate cut rather in the summer, but 
after these figures and with the crown strong I think an 
interest rate easing may come even at the end of this month. 
    "I expect a cut of 25-50 basis points, but maybe rather 50 
basis points." 
 
    LUCIA STEKLACOVA, SENIOR ANALYST, ING BANK BRATISLAVA 
    "It is a positive surprise. This figure should definitely 
wipe out doubts about the expected turnover in the foreign 
trade. 
    "Positive expectations have finally materialised in the real 
figure. The car sector was most likely the key driver in the 
structure. 
    "It further supports the argument for the crown's gradual 
firming throughout the year. This figure is a confirmation of 
our prognosis that the foreign trade deficit should decrease to 
under 2 percent of GDP this year." 
 
MARKET REACTION: 
- The crown firmed to 34.067 per euro from 34.100 ahead of the 
release . It closed at 34.000 on Tuesday. 
 
BACKGROUND: 
- Slovakia's foreign trade deficit widened in 2006, mainly due 
to rising imports of equipment needed for investment projects 
such as car factories being built by PSA Peugeot Citroen 
 and Kia Motors . 
- But the external balance is expected to improve in 2007 when 
the two car assembly plants are scheduled to boost their 
export-oriented production. 
 
LINKS 
- For further details on January foreign trade and other 
past data, Reuters 3000 Xtra users can click on the Slovak 
Statistics Office's website: 
    http://wwww.statistics.sk/webdata/english/index2_a.htm 
 
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