INSTANT VIEW 3-Czech Q4 GDP grows 6.9 pct, sales weaker

                                
 PRAGUE, Feb 15 (Reuters) - The Czech economy expanded at a 
higher than expected 6.9 percent annual rate in the fourth
quarter of 2007, following a revised 6.4 percent growth in the
third quarter.
                                
 The Czech expansion lagged behind the 14.1 percent growth
recorded in neighbouring Slovakia in the October-December
period, but was well ahead of the region's laggard, Hungary,
which reported 0.8 percent growth.
                                
 Retail sales gerw by 5.4 percent in December, lagging
forecast of 5.7 percent growth.
****************************************************************
KEY POINTS:
(pct change)         Q4/07       Q3/07        Fcast Q4
 year/year            6.9        6.4 (6.0)     5.6
 NOTE. GDP up 1.9 percent quarter-on-quarter when adjusted for
seasonal factors and the difference in working days.

                                
                   Dec        Nov         Dec forecast
RETAIL SALES (y/y)    5.4        5.9           5.7

(Click on [ID:nPRA001761] for full table of December retail
sales)
                                
 
- The Statistical Bureau does not release detailed data in its
flash GDP estimate. 

COMMENTARY:
                                
 JIRI SKOP, ANALYST, KOMERCNI BANKA:
                                
 "We expect a slowdown this year to 3.7 percent, mainly due
to a slowdown in the euro zone, the fiscal reform capping
household consumption, and higher inflation which will cut real
household incomes.
                                
 "Unless the crown corrects its gains, it will also have a
negative impact on Czech economic growth."
                                
 
                                
 PETR DUFEK, ANALYST, CSOB:
                                
 "The economy did not lose breath last year, defying the
expectations.
                                
 "It is apparent that this was mainly private demand (driving
GDP) and exports.
                                
 "The exceptional number from the year-end was influenced by
health insurers. Therefore it is necessary to take it positively
but not overrate it."

                                
  DAVID MAREK, CHIEF ECONOMIST, PATRIA FINANCE
                                
 "It is positive information in light of the fact that euro
zone slowed down, the German economy did not grow that fast at
the end of the year... It is unambiguously another indication
that the CNB (central bank) may have been too quick with the
scenario of interest rates, when it predicted that they could
start decreasing.
                                
 "Reversely, now the market can start speculating that
another rate hike may be necessary."
                                
 
MARKET REACTION:
                                
 Czech crown scales new highs at 25.075 to the euro <EURCZK=>
shortly after the data, then dips to 25.150.

                                
 
BACKGROUND:
- For story on analysts' expectations before the data release,
double click on                                [ID:nL12318568]
- Slovak Q4 GDP                                [ID:nL14269487]
- Poland's Q3 GDP                              [ID:nL30323616]
- Hungary's Q4 GDP                             [ID:nL14675075]

LINKS:
- For further details on fourth quarter GDP and past data,
Reuters 3000 Xtra users can click on the Czech Statistical
Bureau's website:
                                
 http://www.czso.cz/eng/csu.nsf/kalendar/2004-hdp

- 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 Jan Lopatka, editing by David Christian-Edwards)