Czech '06 c/a gap more than doubles to 4.7 pct/GDP

...on Monday, as hefty profit outflows took their toll on the external balance. The gap in the account tracking trade flows and transfers of income between the European Union member country and the rest of the world swelled to 4.7 percent of estimated 2006 gross domestic product (GDP), according to Reuters calculations.

That marked a stark contrast to 2005 when the deficit shrank to 2.1 percent from 6.0 percent of GDP in 2004.

The 2006 result was also slightly worse than the 4.5 percent forecast by the finance ministry, which expects the shortfall to shrink back to 3.5 percent of GDP this year.

In December alone, the deficit on the current account of the balance of payments totalled 16.3 billion crowns, overshooting the consensus forecast of a 12 billion gap in a Reuters poll.

The income balance deficit, part of the current account tracking profit repatriation by foreign investors, jumped to 202.4 billion crowns in 2006 from 142.3 billion in 2005.

But of the 2006 number, 96.9 billion were funds that firms reinvested in the country and that did not leave its borders.

Repatriation by foreign investors exceeded analysts' expectations last year as a manufacturing and export boom fuelled profits across an economy growing some 6 percent a year.

Analysts have said the worsening external imbalances might weaken the crown currency or at least slow its appreciation following a nearly 6 percent gain against the euro last year.

It held flat at 28.290 per euro by 0902 GMT from 28.285 just before the data release.

((For INSTANT VIEW of December balance of payments data, double click on the code in brackets: [ID:nL12489419]))

[PRAGUE/Reuters/Finance.cz]