INSTANT VIEW 4-Czech Oct C/A gap nearly treble mkt forecast

    The Czech current account posted 
a deficit of 26.2 billion crowns ($1.25 billion) in October, 
nearly treble the median forecast in a Reuters poll. This is the 
second straight month when the gap came in well above forecasts. 
    The 12-month rolling deficit widened to 146.9 billion 
crowns, or 4.6 percent of this year's estimated gross domestic 
product (GDP), according to Reuters calculations, from 3.75 
percent in the prior month. 
 
KEY POINTS: 
(CZK billions)           Oct         Sept          Oct forecast 
Current Account         -26.22      -12.97         -9.00 
Financial Account        26.76       12.76          n/a 
Net Direct Investment    12.81       12.69          n/a 
 
 (For full table, double click on..................[nPRA001080]) 
 
- The monthly gap is mainly due to a 30.4 billion crown 
shortfall on the income balance, including dividend payouts, 
reinvested profits and other transfers of income. The income 
deficit widened from a 21.5 billion gap a month earlier. 
- The balance of foreign trade in both goods and services shows 
a 5.8 billion crown surplus for the month. 
- Net foreign direct investment reaches 12.8 billion crowns, of 
which the central bank estimates were 8.1 bilion crowns in 
reinvested profits. 
- Portfolio investments show a net 20.2 billion crown inflow 
after a foreign debt issue by power company CEZ . 
 
COMMENTARY: 
    DAVID MAREK, CHIEF ANALYST, PATRIA FINANCE, PRAGUE 
    "The external imbalance is reaching a level where the crown 
could start to be more sensitive to data on foreign trade and 
balance of payments. 
    "Our estimates show that the current account deficit will 
widen to 4.5 percent of GDP this year from last year's 2.1 
percent." 
     
    JAN VEJMELEK, HEAD OF ECONOMICS RESEARCH, KOMERCNI BANKA, 
PRAGUE 
    "The result shows that our concerns about deepening external 
imbalances are justified. The crown is holding (near) record 
highs mainly because of favourable development on other currency 
markets in the region, which the crown has been tracking. (But) 
sooner or later, the unfavourable fundamentals will have to have 
an impact and the crown will have to correct its gains." 
 
    PETR DUFEK, ANALYST, CSOB BANK, PRAGUE 
    "This is the second worst result this year. The growing gap 
in the income balance is still being a drag on the current 
account. 
    "This is not good news for the crown, but I think that the 
number will soon be forgotten." 
 
MARKET REACTION: 
- Crown ticks lower to 27.900 per euro  by 0924 GMT, 
from 27.870 just before the release. 
 
BACKGROUND: 
- Analyst expectations before data release       [ID:nL30680319] 
- Czech Oct foreign trade figures                [ID:nL06178576] 
- Polish Sept C/A                                [ID:nL14378776] 
- Slovak Sept C/A gap                            [ID:nL28190064] 
- Hungary's Q3 C/A gap                           [ID:nBUD001815] 
- Report on last Czech c.bank rate decision       [ID:nL3091748] 
                                 [ID:nPRA001058] [ID:nPRA001059] 
 
LINKS: 
- For further details on October of payments numbers and past 
data, Reuters 3000 Xtra users can click on the Czech National 
Bank's website: 
    http://www.cnb.cz/en/statistics/bop_stat/ 
 
- For LIVE Czech economic data releases, click on        
- Instant Views on other Czech data                 [CZ/INSTANT] 
- Overview of Czech macroeconomic indicators            [CZ/ECI] 
 
- Key data releases in central Europe    [CEE-CONVERGENCE-WATCH] 
- For Czech money markets data click on                 
- Czech money guide                                       
- Czech benchmark state bond prices                    
- Czech forward money market rates                       
 
 ((Writing by Marek Petrus; Editing by Alan Crosby; 
prague.newsroom@reuters.com; Reuters Messaging: 
marek.petrus.reuters.com@reuters.net; +420 224 190 477)) 
 ($1=20.98 Czech Crown) 
  Keywords: CZECH BALANCE/  
    

[PRAGUE/Reuters/Finance.cz]