INSTANT VIEW 3-Czech May c/a deficit double fcast

                                
 PRAGUE, July 13 (Reuters) - The Czech current account showed
a 23.98 billion crown ($1.19 billion) deficit in May, more than
double what markets expected, due to dividend payments, the
Czech central bank said on Tuesday.
                                
 Analysts in a Reuters poll forecast a 10 billion crown
shortfall.
                                
 Dividend payments amounted to 34.3 billion crowns in May,
the bank said.
                                
 The rolling 12-month deficit widened to 45.5 billion, equal
to about 1.2 percent of estimated 2010 gross domestic product,
according to Reuters calculations.
****************************************************************
KEY POINTS:
(CZK billions)           May           April         May fcast
Current Account         -23.98         12.40        -10.0
Financial Account        36.37        -20.36          n/a
Net Direct Investment     7.67          3.89          n/a

 (For full table, double click on [ID:nPRA005141])
                                
 
                                
 COMMENTARY:
                                
 DAVID MAREK, CHIEF ECONOMIST, PATRIA FINANCE
                                
 "It is a surprise, although it is the opposite surprise than
in April. So overall one can say that the balance of payments is
developing as expected, only the distribution in individual
months is different."
                                
 "The crown reaction proves that markets remain unmoved, so I
think the only surprise is that companies shifted dividends to
another month."
                                
 
                                
 HELENA HORSKA, ECONOMIC RESEARCH, RAIFFEISENBANK
                                
 "It is the largest dividend outflow since June last year.
The deficit is the deepest since June 2008. Market expected the
deficit at 10 billion but it is no tragedy. The dividend outflow
is very hard to predict... The balance of payments remains in a
good condition."
                                
 
                                
 MIROSLAV PLOJHAR, EMEA ECONOMIST, JP MORGAN
                                
 "The April surplus was partially offset by the May gap... On
the one hand we get a rather significant surplus on the trade
balance and on the other hand there is the dividend outflow, so
altogether including reinvested profit, which are part of the
headline number... the current account is roughly around zero,
which means a balanced external position of the Czech Republic."
                                
 "The dividend season is usually between April and the end of
September and it is hard to tell when (and which) dividends are
included, that's why the number can be volatile, which the case
of all economies with a lot of foreign investment."
                                
 
                                
 MARKET REACTION:
                                
 The crown <EURCZK=> weakened to 25.366 to the euro at 0827
GMT from 25.345 before the data.
                                
 
                                
 DETAILS
                                
 - The income balance including dividend payments and
estimated reinvested earnings showed a 39.5 billion crown gap,
more than six times wider than the 6 billion crown deficit in
April.
- The goods and services balance ran a surplus.
- The balance of current transfers included a surplus of 5
billion crowns on transfers from the EU budget to the Czech
Republic.
- As regards the capital account, a net total of 7.2
billion crowns was drawn from the EU budget. This account
includes revenues from the sale of emission permits of 0.4
billion crowns.
- Capital inflow on the financial account under ECB methodology
was 36.4 billion crown.
- The net direct investment inflow reached 7.6 billion crowns,
of which reinvested earnings were around 4.8 billion crowns.
- The portfolio investment outflow of 4.9 billion crowns was
influenced above all by purchases of shares by residents abroad.
- The annual net direct investment inflow total (in the
longer-running trend) was flat.
- The annual net portfolio investment total (in the
longer-running trend) has been showing an increasing inflow of
funds.
- Other investment showed a surplus of 39.6 billion crowns, due
to a change in the short-term international position of banks (a
decline in short-term assets and a rise in short-term
liabilities).
- The Czech central bank international reserves adjusted for
valuation changes rose by 5.7 billion crowns.
                                
  
 BACKGROUND:
- Analyst expectations before data release       [ID:nLDE65T123]
- Czech May foreign trade figures                [ID:nLDE666086]
- Polish April C/A data                          [ID:nLDE64G1EE]
- Slovak April C/A data                          [ID:nPRA005120]
- Hungary's Q1 C/A data                          [ID:nLDE65S24L]
- Report on last Czech c.bank rate decision......[ID:nLDE65K1NV]
                                
              [ID:nPRG004247] [ID:nHJJ000030] [ID:nL71022443]

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

 (Reporting by Jana Mlcochova; editing by Stephen Nisbet)