INSTANT VIEW 3-Slovak May trade gap double expectations

...in May, compared with a revised gap of 1.0 
billion in April, the Statistics Office said on Thursday. 
     
KEY POINTS: 
FOREIGN TRADE         MAY 07        MAY 07 FCAST 
 (SKK bln) 
 Balance              -3.539           -1.6 
  (Full table of data.......................[ID:nPRG000416]) 
  
    NOTE: The market had expected a trade deficit of 1.6 billion 
crowns in May, according to a Reuters survey of analysts earlier 
this month  . 
 
- The Statistics Office did not release a detailed breakdown of 
May trade data. 
- The April balance was revised to a deficit of 1.002 billion 
crowns from a previously reported gap of 1.166 billion. 
     
ANALYST COMMENTS: 
    MARIA VALACHYOVA, SENIOR ANALYST, SLOVENSKA SPORITELNA 
    "We expected a deficit of 2.2 billion crowns, this is a bit 
worse. There were higher imports than we expected. 
    "Foreign trade is still much better than a year ago. 
Positive outlook for the production side of the economy is not 
changed. 
    "I expect modest deficits in the coming months, with the 
June gap slightly below May. The summer will be affected by 
holidays at car factories, but then again we expect an 
improvement." 
     
    LUCIA STEKLACOVA, SENIOR ANALYST, ING BANK, BRATISLAVA 
    "The May figure is worse than expected, exports and imports 
showed slower dynamics. 
    "We expected delayed energy imports to worsen dynamics in 
the second quarter, and this could be the reason for the  
continuation of the negative trend in the trade balance. 
However, today's export figures are not a disappointment." 
     
    JURAJ VALACHY, ANALYST, TATRA BANKA, BRATISLAVA 
    "The trade gap is much worse than expected. It is a surprise 
given a very good development of industrial production. 
    "It was probably due to higher imports of mineral resources, 
but we do not know the structure yet. The figure is in line with 
the central bank's forecast, so there is no reason for them to 
change interest rate settings." 
     
MARKET REACTION: 
 - The crown showed no immediate reaction to May trade data. It 
stood at 33.325 per euro  as of 0715 GMT, compared with 
Wednesday's 13-week high of 33.300 and a close of 33.345. 
     
BACKGROUND: 
- Slovakia's foreign trade deficit widened in 2006, mainly due 
to rising imports of equipment needed for investment projects 
such as car factories of PSA Peugeot Citroen  and Kia 
Motors . 
- But the external balance is improving in 2007 as two car 
assembly plants boost their export-oriented production. 
 
LINKS 
- For further details on May 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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