PRAGUE, Dec 11 (Reuters) - The Czech current account showed
a 12.41 billion crown ($709.5 million) surplus in October,
defying market expectations for an 11.0 billion crown deficit,
data showed on Friday.
The outcome was affected by a surplus on the balance of
trade in goods and services -- respectively showing surpluses of
19.84 billion crowns and 3.83 billion crowns.
October foreign trade overall showed a 17.5 billion surplus,
double the forecast.
The income balance -- which includes dividend payments and
other profits booked by foreign companies -- showed a 9.92
billion crown deficit, smaller than the last year's 23.46
billion gap and than the 25.96 billion shortfall in September.
It reflected a dividend payment of 0.3 billion crowns from
Czech subsidiaries to their foreign parent firms and estimated
reinvested earnings of 7.8 billion crowns, the central bank
said.
The 12-month rolling deficit dipped to 48.23 billion crowns
($2.76 billion), or 1.3 percent of estimated 2009 nominal gross
domestic product (GDP), according to Reuters calculations.
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KEY POINTS:
(CZK billions) Oct Sept Oct forecast
Current Account 12.41 -5.87 -11.5
Financial Account -5.94 -10.58 n/a
Net Direct Investment 6.11 -30.26 n/a
(For full table, double click on [])
COMMENTARY:
HELENA HORSKA, ANALYST, RAIFFEISENBANK
"A high October trade balance surplus and very low outflow
of income abroad led to an unexpected current account surplus."
DAVID MAREK, CHIEF ECONOMIST, PATRIA FINANCE
"Apart from the foreign trade balance, other segments
developed positively as well, such as services and income."
"It is showing that in this area the Czech economy is
stable, which could lead to a short term strengthening of the
crown. But there is a whole range of risks, including public
budgets, which have the opposite effect so at the moment there
is no fundamental reason for the crown to move in this or that
direction."
JAN VEJMELEK, HEAD OF ECONOMIC RESEARCH, KOMERCNI BANKA
"The current account surprised positively a fourth month in
a row. The main reason is a significantly better result of
foreign trade but the deficit in the income balance fall
significantly as well."
"Both (of these) are a result of a weak economic activity in
the Czech Republic."
VOJTECH BENDA, SENIOR ANALYSTS, ING WHOLESALE BANK
"The trade balance is good mainly due to exports that have
stabilized while imports continued to fall due to a weak
domestic demand."
"The favourable development should continues in coming
months and should help the crown strengthen."
MARKET REACTION:
The crown <EURCZK=> weakened to 25.78 per euro at 0938 GMT
from 25.75 just before the data.
DETAILS:
- The balance of current transfers includes a surplus of 0.9
billion crowns on transfers from the EU budget to the Czech
Republic.
- The capital account included a surplus of 1.7 billion crowns
on transfers from the EU budget.
- The annual current account deficit total is decreasing.
- The capital outflow on the financial account was around 5.9
billion crowns under ECB methodology.
- The net inflow of direct investment was 6.1 billion crowns and
was affected by expected reinvested earnings.
- The inflow of portfolio investment of 28.7 billion crowns was
due primarily to issues of bonds by state-owned entities abroad.
- The total volume of bonds issued abroad exceeded 19 billion
crowns.
- The inflow of capital into the Czech Republic was also
affected by the sale of part of foreign debt securities from
Czech entities' portfolios and a rise in holdings of government
bonds by foreign investors.
- The annual net direct investment inflow total is decreasing.
- The annual net portfolio investment total is showing an inflow
of funds.
- Other investment showed a deficit of 37.4 billion crowns as a
result of a change in the short-term international position of
banks (a rise in short-term assets) and an increase in the
short-term assets of the corporate sector abroad.
- The government drew loans amounting to 2.8 billion crowns from
the EIB for the development of transport infrastructure.
- The Czech central bank's foreign currency reserves (adjusted
for valuation changes) rose by 2.6 billion crowns.
BACKGROUND:
- Analyst expectations before data release []
- Czech Oct foreign trade figures []
- Polish Sept C/A data []
- Slovak Sept C/A data []
- Hungary's Q2 C/A gap []
- Report on last Czech c.bank rate decision.......[]
[] [] []
LINKS:
- For further details on October 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 []
- Overview of Czech macroeconomic indicators []
- Key data releases in central Europe []
- 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 Patrick Graham)
