INSTANT VIEW 4-Czech April C/A surplus CZK 9.89 bln

                                
 PRAGUE, June 17 (Reuters) - The Czech current account showed
a 9.89 billion crown ($513.8 million) surplus in April, much
better result than a 5.3 billion deficit forecast by analysts,
data showed on Wednesday.
                                
 The 12-month rolling deficit narrowed to 101.9 billion
crowns ($5.29 billion), or 2.8 percent of 2008 gross domestic
product (GDP), according to Reuters calculations.
****************************************************************
KEY POINTS:
(CZK billions)            April        March      April forecast
Current Account           9.89         4.46          -5.3
Financial Account       -11.31       -15.17          n/a
Net Direct Investment    10.84         7.75          n/a

 (For full table, double click on [ID:nPRA002620])
                                
 
- The current account surplus was thanks to surpluses on the
balances of goods, services and current transfers.
- The income balance showed a much smaller deficit than a month
ago (including dividend payments and estimated reinvested
earnings).
- The balance of current transfers includes a surplus of 6.0
billion crowns on transfers from the EU budget to the Czech
Republic.
- On the capital account, a net total of 3.3 billion crowns was
drawn from the EU budget.
- The annual current account deficit total has been decreasing.
- The capital outflow on the financial account shrank to around
11.3 billion crowns from more than a 15 billion a month ago.
- Net inflow of direct investment rose to 10.9 billion crowns
from 7.7 billion in March. Net estimated reinvested earnings
made around 6.7 billion crowns of that amount.
- The inflow of portfolio investment rose to 13 billion crowns
from 8 billion in March.
- Other investment showed a deficit of 25 billion crowns, due to
a change in the short-term international position of banks (a
decline in short-term liabilities).
- The government sector drew 0.9 billion crowns from an EIB loan
for water management infrastructure.
- The Czech central bank's (CNB) international reserves,
(adjusted for valuation changes) recorded a rise of 7.1 billion
crowns, as a result of CNB client transactions.
                                
 
 COMMENTARY:
                                
 PETR DUFEK, ANALYST, CSOB
                                
 "This is a positive result caused mainly by the surplus of
foreign trade in goods and services, an inflow of EU funds and
in the end also weaker dividends paid to foreign shareholders. 
                                
 "The current account will not influence the decision-making
on interest rates, but it is one of few relatively positive
numbers."
                                
 
                                
 VOJTECH BENDA, SENIOR ECONOMIST, ING WHOLESALE BANKING
                                
 "The surplus was due to a drop in imports for further
investment and consumption which optically improves the trade
balance on the one hand. On the other hand a drop in income from
foreign investment... lowers the deficit on income balance."
                                
 "None of these things is a success. It is positive only
because the current account does not presently pose a risk for
destabilisation of the currency, on the other hand it is a
pretty strong indicator that the economy is weak."
                                
 
                                
 JAROMIR SINDEL, CHIEF ECONOMIST, CITIBANK, PRAGUE
                                
 "It was a surprise surplus mainly reflecting lower dividend
outflow from FDI. On the financial account, there were also some
positive news that FDI to equity increased by almost 3 billion
crowns, which is positive in these times. "
                                
 "Also portfolio inflows reflected some more than 11 billion
in inflows to government bonds, which shows us the Czech
Republic has also benefitted from the positive sentiment for
emerging markets."
                                
 "The trade balance is likely to worsen in the rest of the
year as in the first quarter we likely saw some adjustment of
production... Overall our external borrowing needs will be
covered this year."
                                
 
 MARKET REACTION: 
                                
 Crown edged down briefly to 26.715 to the euro <EURCZK=>,
from 26.688 just ahead of the data but soon recovered to the
previous levels.
                                
 
  BACKGROUND:
- Analyst expectations before data release         [ID:nL329982]
- Czech April foreign trade figures               [ID:nL8792638]
                                
                                               [ID:nL8443842]
- Polish March C/A                                [ID:nLF943490]
- Slovak March C/A gap                           [ID:nBSD000197]
- Hungary's Q4 C/A gap                           [ID:nBUD002872]
- Report on last Czech c.bank rate decision.......[ID:nL5129651]
 [ID:nPRG001440] [ID:nL71026517] [ID:nL71006613] [ID:nPRA002548]

LINKS:
- For further details on April 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       <ECONCZ>
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- For Czech money markets data click on                <CZKVIEW>
- Czech money guide                                      <CZK/1>
- Czech benchmark state bond prices                   <0#CZBMK=>
- Czech forward money market rates                      <CZKFRA>

 (Reporting by Jana Mlcochova)