* Czech economy ends half a year of recession
* Czech GDP up 0.3 pct in Q2, market expected -0.4 pct
* Year-on-year drop still the worst on record, -4.9 pct
* INSTANT VIEW []
(Adds background, comment, market reaction)
By Jan Lopatka
PRAGUE, Aug 14 (Reuters) - The Czech economy surprisingly
rebounded in the second quarter, following signs of recovery in
western Europe but analysts warned feeble household spending
would delay any strong recovery.
The Czech Statistical Bureau said on Friday the economy grew
0.3 percent from the previous three months -- ending half a year
of recession -- despite predictions of a 0.4 percent decline.
Total output of goods and services in the central European
economy still contracted by record 4.9 percent year-on-year in
the second quarter, the Czech Statistical Bureau said, worse
than expected by the market.
The good quarterly result followed positive surprises from
France and especially Germany -- the key market for Czech
exports.
"The German economy found a floor... it means that the Czech
economy found a floor probably not much later than Germany,"
said Miroslav Plojhar, EMEA economist at JP Morgan.
"If it (proves) that the German economy is rebounding, then
the Czech economy will not lag that rebound."
But analysts said that domestic demand would suffer due to
rising unemployment and hopes for a robust turnaround may be too
rosy.
"We will have to wait for a few more quarters before we can
rely on household consumption," said Helena Horska, an analyst
at Raiffeisenbank. "Growing unemployment is holding spending
back and it will take some time before companies start hiring
again -- roughly in the middle of 2010."
The concern about regional growth reflected poor results
from other central and east European countries. Hungary reported
a 7.6 percent year-on-year drop for the second quarter, while
the Romanian economy shrank by 8.8 percent and Slovakia's by 5.3
percent. []
Analysts questioned the discrepancy between the
better-than-expected Czech quarterly and worse year-on-year
figure, and the statistical bureau confirmed it had made
revisions to both 2008 and first quarter 2009 data that
distorted the comparative bases.
"We included information that we did not have in the spring
about 2008 and that we of course did not have about the first
quarter," Jan Heller, CSU's head of quarterly national accounts
department, told Reuters.
He said the revisions were not yet complete and therefore
they would be released together with final second quarter GDP
data due out on Sept. 8.
The crown currency did not show any visible reaction to the
data, trading a touch firmer at 25.79 to the euro <EURCZK=> at
0809 GMT from 25.805 ahead of the data.
(Editing by Andy Bruce)
