INSTANT VIEW 3-Czech Dec trade deficit bigger than forecast

    The Czech foreign trade balance 
posted a 3.25 billion crown ($150.5 million) monthly deficit in 
December, bigger than the market had expected after a 4.03 
billion crown shortfall in the same month a year earlier. 
    For the whole of last year, the trade balance showed a 
cumulative surplus of 47.27 billion crowns, the biggest in the 
country's history, after a 38.62 billion crowns surplus in 2005. 
 
KEY POINTS: 
(in bln CZK)           Dec        Nov           Dec fcast 
 balance              -3.25       6.43          -2.0 
(nominal y/y change in pct) 
 exports              12.5       16.1            n/a 
 imports              11.7       14.2            n/a 
(brackets denote previously reported data) 
 
 (For full table of trade data, click on........[ID:nPRA001136]) 
 
- According to seasonally-adjusted preliminary data, exports 
dipped 0.5 percent in December from November while imports fell 
4.3 percent month-on-month. 
- The year-on-year narrowing in the monthly deficit from 4.03 
billion crowns in December 2005 came on the back of a 3.9 
billion rise in machinery and transport equipment surplus, and a 
0.7 billion drop in the deficit in trade with mineral fuels. 
- In euro terms, exports rose 17.4 percent and imports by 16.5 
percent year-on-year in December, outpacing the growth rates in 
local currency terms because of a firming in the crown. 
 
COMMENTARY: 
    RADOMIR JAC, CHIEF ANALYST, PPF ASSET MANAGEMENT: 
    "The good news is that both overall exports and imports 
maintained strong annual growth dynamics in December despite 
lower number of working days, which is a signal that activity in 
the Czech economy remains strong. Overall, we regard December 
data as good news regarding Czech foreign trade and we expect 
Czech foreign trade surplus to widen to roughly 75 billion 
crowns this year after 47 billion crowns reached in 2006. 
     
    PAVEL MERTLIK, CHIEF ECONOMIST, RAIFFEISENBANK, PRAGUE: 
    "December repeated the story of the previous three months: a 
combination of excellent performance by industrial exporters and 
lower import prices of commodities (mainly oil and natural gas) 
significantly supported the trade balance, which ended slightly 
better than we had expected." 
  
MARKET REACTION: 
    The crown  dropped to 28.240 to the euro from 
28.210 just ahead of the data. 
     
BACKGROUND: 
- Market expectations before release             [ID:nL01866382] 
- Slovak Nov trade figures                       [ID:nL11569479] 
- Polish trade in Nov                            [ID:nWAR005185] 
- Hungary's Nov trade data                       [ID:nL09928132] 
- Report on last Czech c.bank rate decision      [ID:nPRA001122] 
                                 [ID:nL02157584] [ID:nL25513531] 
 
- For further details on December foreign trade and other past 
data, Reuters 3000 Xtra users can click on the Czech Statistical 
Bureau's website: 
    http://www.czso.cz/eng/csu.nsf/kalendar/2004-vzo 
 
- For LIVE Czech economic data releases, click on        
- Instant Views on other Czech data click on        [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 Gerrard Raven; 
prague.newsroom@reuters.com; Reuters Messaging: 
marek.petrus.reuters.com@reuters.net; +420 224 190 477)) 
 ($1=21.59 Czech Crown) 
  Keywords: CZECH TRADE/  
    

[PRAGUE/Reuters/Finance.cz]