INSTANT VIEW 4-Czech Dec C/A gap CZK 20.6 bln, wider than fcast

                                
 PRAGUE, Feb 12 (Reuters) - The Czech current account posted
a deficit of 20.63 billion czech crowns ($933.9 million) in
December, wider than the market forecast for a 17.3 billion
crown gap, data showed on Thursday.
                                
 The 12-month rolling deficit rose to 111.8 billion crowns,
or 3.2 percent of 2007 gross domestic product (GDP), according
to Reuters calculations.
****************************************************************
KEY POINTS:
(CZK billions)            Dec          Nov          Dec forecast
Current Account         -20.63        -8.72         -17.3
Financial Account        28.09        17.22          n/a
Net Direct Investment    12.75         8.92          n/a

 (For full table, double click on [ID:nPRA002368])
                                
 
- The deficit was due to a 15.1 billion crown shortfall on the
income balance, and a 9.5 billion crown trade gap.
- The service balance ran a surplus under the balance of
payments methodology.
- The balance of current transfers included a deficit of 1.9
billion crowns on transfers from the Czech Republic to the EU
budget. As for the capital account, a net total of 1.4 billion
crowns was drawn from the EU budget.
- Capital inflows on the financial account were around 28.1
billion crowns under ECB methodology.
- The net inflow of direct investment was 12.75 billion crowns,
of which net estimated reinvested earnings were around 9.0
billion crowns. The outflow of portfolio investment amounted to
3.7 billion crowns.
- The annual net direct investment inflow total has been
increasing slightly.
- Other investment showed a surplus of 21.5 billion crowns in
December.
 COMMENTARY:
                                
 VOJTECH BENDA, SENIOR ECONOMIST, ING, PRAGUE
                                
 "We can see some moderation of the previous increasing
deficits of income. We see the balance has stabilised on the
levels of 2007, so we don't see any gradual increase of the
income balance...because it is associated with the situation of
trade balance and FDI."
                                
 "But I would expect further deterioration of the current
account in 2009, but not to the extent of 2008 because there
will not be such a huge dividend outflow."
                                
 
                                
 MIROSLAV PLOJHAR, EMEA ECONOMIST, JP MORGAN       
                                
 "(The data shows) the Czech Republic will...fall into a
recession and the current account (deficit) will rather widen."
                                
 "This is due to the fact that the economy was not overheated
and the current account used to be in surplus."
                                
 "Due to the drop in export markets, exports fall faster than
imports but on the other hand this can put brakes on dividend
outflow in the future."
                                
 
                                
 PAVEL SOBISEK, CHIEF ECONOMIST, UNICREDIT CR      
                                
 "It is clear that given the trade deficit was relatively
high that it translated into the current account, on the other
hand the other items did not show any substantial variations
from the usual seasonal trends.
                                
 "I do not think that the current account would be something
that will move the market."
                                
 "Of course in the long-term there is a question whether the
current account will be influenced by a possible deterioration
of profitability of companies, and therefore an ability to
generate profits. That could paradoxically improve the current
account in certain way."
                                
 
                                
 MIROSLAV FRAYER, ANALYST, KOMERCNI BANKA
                                
 "It was slightly worse than expectations... and is another
factor for the further weakening of crown currency."
                                
 "We will see further deterioration of current account due to
a worsening income account."
                                
 
 MARKET REACTION:
                                
 The crown dropped to 28.735 to the euro <EURCZK=> after the
data but returned to previous levels of 28.69 by 0912 GMT.
                                
 
  BACKGROUND:
- Analyst expectations before data release        [ID:nL2146509]
- Czech Dec foreign trade figures                 [ID:nL5137664]
                                
                                               [ID:nL5531824]
- Polish Nov C/A                                  [ID:nLC541597]
- Slovak Nov C/A gap                             [ID:nPRG001209]
- Hungary's Q3 C/A gap                            [ID:nLV431424]
- Report on last Czech c.bank rate decision.........[ID:nL54762]
                                
               [ID:nL5536584] [ID:nPRA002354] [ID:nPRG001229]

LINKS:
- For further details on December 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 Jason Hovet)