INSTANT VIEW 3-Czech Q1 GDP down 3.4 pct, price growth flat

                                
 PRAGUE, June 9 (Reuters) - The Czech economy fell by a real
3.4 percent in the first quarter versus a year earlier, data
showed on Tuesday, confirming a flash estimate released last
month.
                                
 The data showed an equal 3.4 percent quarterly decline of
activity.
                                
 Separately released May inflation figures showed prices were
flat from April, below market expectation of 0.1 percent growth.
                                
 The Czech contraction outperformed the decline in
neighbouring Slovakia, which posted a 5.6 percent year-on-year
drop in January-March, and a 6.7 percent drop in Hungary.
                                
 Poland was the only country in the region to buck the trend
with 0.8 percent growth.
                                
 
****************************************************************
GDP:
(pct change)            Q1/09      Q4/08      Q1/08     2008
Real change yr/yr   -3.4 (-3.4)  -0.1 (0.7)  3.8 (2.9)  2.8
(3.1)     
                                
 NOTE. GDP fell 3.4 percent quarter-on-quarter when adjusted
for seasonal factors and the difference in working days.
CENTRAL BANK FORECAST: First-quarter GDP decline of 2.5 percent,
released in its most recent projection unveiled in May.
 (Full table of GDP data................[ID:nPRA002606])
INFLATION
(pct change)          May          April        May forecast
 month/month          0.0         -0.1          0.1
 year/year            1.3          1.8          1.4
 Details of May inflation data...................[ID:nPRG001459]
                                
 
COMMENTARY:
                                
 RADOMIR JAC, CHIEF ANALYST, GENERALI PPF ASSET MANAGEMENT
                                
 "Inflation is broadly in line, only one tenth of a
percentage point above the central bank's forecast, nothing
major."
                                
 "As for GDP I would still bet on flat rates at the July
session because the factors that influence monetary conditions
in the Czech economy, the crown exchange rate and PRIBOR, are
moderately softer now than the central bank had expected."
                                
 "So the conditions are easing perhaps slightly faster."
                                
 "(As for the structure) gross fixed capital formation fell,
(but) we have a nice contribution from households, perhaps
better than expected, on contrary inventories also fell."
                                
 "Foreign trade had a slightly negative influence but from
the point of view on consumption there's a positive surprise as
it was stronger than expected."
                                
 "Generally we hope that the next months will show some
stabilisation of the decline in economy."
                                
 
                                
 DAVID MAREK, CHIEF ECONOMIST, PATRIA FINANCE
                                
 "All figures met forecasts, so there are no surprises and no
changes to outlooks for the currency or interest rates."
                                
 "As for GDP, we now have more details, and we can see it is
not only about the negative impact of foreign trade but also
about the quickly falling investment activity in the Czech
Republic."
                                
 "That's one reason more for the central bank to cut interest
rates. It's not only about foreign demand as this recession is
now also about domestic demand."
                                
 
                                
 DETAILS OF GDP
- The global crisis resulted in a significantly different
development from what was expected, the statistical office said.
- Foreign trade result weighed on the first quarter.
                                
 
                                
 INFLATION
- Year-on-year inflation was 1.3 percent, well below the central
bank's 2009 target of inflation of 3 percent, plus or minus one
percentage point.
- The monthly price development was mainly due to an increase in
fuel prices, which rose 2.3 percent while food prices dipped
mainly due to a 7.3 percent growth in prices of bread and 10.6
percent fall in prices of vegetables.
- The CNB's quarterly prediction sees consumer price inflation
of 1.1 percent in second quarter of 2010 and 1.7 percent in the
third quarter of 2010. Consumer inflation net of impact of
indirect tax changes is seen at 1.4 percent in the second
quarter of 2010 and 1.7 percent in third quarter of 2010.
                                
 
BACKGROUND:
- The central bank decreased the key two-week repo rate by 25
basis points to 1.50 percent <CZCBIR=ECI> on May 7.
- Report on last Czech c.bank rate decision.......[ID:nL5129651]
 [ID:nPRG001440] [ID:nL71026517] [ID:nL71006613] [ID:nPRA002548]
- For story on analysts' expectations before the data release,
double click on........[ID:nLF75640.[ID:nLC9960].[ID:nLF726297]
- Slovak Q1 GDP..................................[ID:nL3618633]
- Poland's Q1 GDP................................[ID:nLT568363]
- Hungary's Q4 GDP..............................[ID:nnBUD002998]

LINKS:
- For further details on first 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>
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- 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)