* What: Czech foreign trade data Nov 6, CPI Nov 9
* Trade surplus to grow, CPI to reach negative ground
* For TABLE with complete forecasts, click on []
By Mirka Krufova
PRAGUE, Nov 3 (Reuters) - The Czech Republic's foreign trade
surplus likely grew in September on the back of improving
manufacturing output, a Reuters poll showed on Tuesday.
The Czech economy has most likely moved past its worst but
faces a slow return to growth as companies struggle to win back
foreign orders, and domestic consumption is hit by a rise in
unemployment that is not expected to peak until next year.
The median forecast in a poll of 13 analysts showed
September foreign trade <CZ/ECON04> recorded a 15 billion crown
($831 million) surplus, up from 10.6 billion in August.
The recession -- at a record 5.5 percent in the second
quarter -- has pushed inflation to zero, and the poll saw prices
falling into negative territory for the first time since
mid-2003, to minus 0.1 percent in October.
Analysts have warned of a W-shaped recovery from the
highly-open economy's worst fall in more than a decade, and
foreign trade is a main driver.
Imports in the period likely dropped 15.4 percent, outpacing
a 12.3 percent fall for exports.
"For September the outlook is quite positive as we have
still quite solid data on the industrial output, which are
positively correlated to exports," Raiffeisenbank analyst Michal
Brozka said.
A preliminary reading for September showed industrial output
fell 11.9 percent year-on-year, in line with expectations,
accelerating slightly from the previous month but off lows seen
earlier this year.
The end of German scrap subsidies on trading in old cars for
new ones, which had given a boost to the key Czech automotive
sector, is seen putting a drag on industry in the final quarter
of the year.
However, analysts have said other sectors of the economy
were on the mend, keeping the country on a gradual economic
recovery even as consumers continue to cut back as unemployment
reaches new multi-year highs. []
The drop in retail sales was seen accelerating to 6 percent
year-on-year in September, the poll showed, but unemployment
likely stagnated at a more than three-year high of 8.6 percent
in October.
Analysts expect a dip in consumer prices to last only a
short time. The central bank, which meets on Thursday over
interest rates, has been concerned with inflation undershooting
its 2 percent plus or minus 1 percentage point target next year.
Most analysts, though, see the board keeping interest rates
unchanged at a record low of 1.25 percent this week, although
some still see the chance for one final cut. []
(Writing by Jason Hovet; Editing by Andy Bruce)
