PRAGUE, March 14 (Reuters) - The Czech current account
showed a 0.31 billion crown ($17.79 million) deficit in January,
narrower than a revised 4.69 billion crown gap in December, the
central bank said on Monday.
The data was released under a new methodology, in reaction
to changes in trade reporting by the country's statistics
office. The changes have significantly reduced monthly trade
surpluses.
The current account deficit in January was due to deficits
on the income balance and the balance of current transfers. The
revised December figure follows an original reading of 0.69
billion crown deficit.
January's goods and services balance ran a surplus, the data
showed. The amount of dividends paid was 0.1 billion crowns.
The rolling 12-month deficit widened to 154.80 billion
crowns, equal to about 4.2 percent of the latest 2010 gross
domestic product estimate, according to Reuters calculations.
The data also showed the net inflow of direct investment
reached 7.4 billion, of which net reinvested earnings were 5.6
billion crowns.
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KEY POINTS:
In line with the start of publication of national external
trade statistics, the central bank (CNB) has begun to release
its national presentation of the annual balance of payments
data.
The crux of the change is the exclusion of branding, i.e.
margin payments to non-residents registered in the Czech
Republic solely for VAT payment, from the cross-border goods and
services trade statistics.
In addition, the method for calculating direct trade costs
has been adjusted and a new procedure for calculating the
balance of services has been implemented. The CNB will continue
to release national balance of payments data only.
(For full table, double click on []
MARKET REACTION:
The Czech crown <EURCZK=> was a touch weaker at 24.33 to the
euro from 24.32 before the data.
COMMENTARY:
PETR DUFEK, DIRECTOR OF MACROECONOMIC RESEARCH, CSOB
"Current account was a bit surprising, but mainly due to
higher reinvested profits and cash outflow to the EU budget.
Therefore it is not necessary to view these figures as poor as
they look at first glance."
"January used to be a strong month, although reinvested
earnings is only an estimated variable that can change in time.
Dividends did nothing this time. The overall current account is
heading toward a deficit beyond the 3 percent (of GDP) border."
DETAILS:
- The balance of current transfers includes a deficit of 3.3
billion crowns on transfers from the Czech Republic to the EU
budget.
-No revenues from the EU budget were recorded on the capital
account, but revenues from the sale of emission permits were 0.4
billion crowns.
- The annual current account deficit total has been rising in
the longer run.
- Capital outflow on the financial account was 3.7 billion
crowns under the ECB methodology.
- The net inflow of portfolio investment includes foreign bonds
issued by state-owned entities totalling 190 million euros.
- This was offset by a decline in non-residents' holdings of
crown bonds and purchases of foreign equity and debt securities
by residents.
- The longer-term trend of the annual net direct investment
inflow total has been rising moderately.
- The annual net portfolio investment total has also been
showing a longer-term inflow of funds.
- Other investment ran a deficit of 30.9 billion crown, owing to
a change in the short-term international position of banks.
- The Czech central bank's international reserves fell by 29.5
billion crowns, adjusted for valuation changes. This was due
mainly to lower foreign currency client deposits with the CNB.
BACKGROUND:
- Czech January foreign trade figures []
- Polish December C/A data []
- Slovak December C/A data []
- Hungary's Q3 C/A data []
- Report on last Czech c.bank rate decision......[]
[] [] [] []
[]
LINKS:
- For further details on January 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 Michael Winfrey and
Jason Hovet)
