(Repeats story published late on Tuesday)
* Key Czech macro data through 2010
* 2009 GDP to show record drop, recovery in 2010
* For forecast details click on []
By Mirka Krufova and Jana Mlcochova
PRAGUE, June 16 (Reuters) - The Czech economy will contract
at the fastest pace this year since the country's foundation in
1993 but should return to growth next year, helped by a recovery
in the euro zone, a Reuters poll showed on Tuesday.
A plunge in western demand drove the small and open
ex-communist economy into a record contraction of 3.4 percent in
the first quarter, compared both with the previous three months
and a year ago.
The median forecast in the poll of 16 analysts showed gross
domestic product would shrink by 3.2 percent for the whole of
2009, a deeper drop than official forecasts.
Growth should resume in 2010 at a 1.2 percent pace, the
median forecast showed, compared with above 6 percent growth
rates between 2005 and 2007.
However, "the first quarter 2009 GDP result supports our
bearish forecast for a contraction in 2009 by 4.7 percent and
only a slight recovery or even stagnation seems the most
probable scenario in 2010," said Vojtech Benda, a senior
economist at ING Wholesale Banking.
The central bank expects GDP to shrink by 2.4 percent this
year and grow at 1.4 percent in 2010, and the Finance Ministry
sees a 2.3 percent contraction in 2009 followed by a 0.8 percent
expansion next year.
Economists said a revival in the euro zone was a condition
for any improvement in the Czech economy.
"If the euro zone does not improve, it is hard to find any
internal mechanisms that could enable the Czech economy to
recover, given how open and export reliant it is," said Miroslav
Plojhar, EMEA economist at JP Morgan.
MANUFACTURING, EXPORT WEAKNESS
Exports, which account for about 70 percent of the country's
gross domestic product, plunged by 22.8 percent year-on-year in
April, the second steepest drop since the splitting up of
Czechoslovakia in 1993. Imports plummeted 26 percent.
Industrial production, the backbone of Czech exports, fell
22.1 percent in April, the sixth straight double-digit drop.
"Poor results for April industrial production and exports
support our view that a further quarter-on-quarter (GDP)
contraction can be expected in the second quarter of 2009,"
ING's Benda said.
A rise in unemployment and stagnation in real wage growth
will likely hammer private consumption -- which still grew by 3
percent year-on-year in the first quarter -- while record low
capacity utilisation will hit capital formation, Benda said.
Analysts predicted that the central bank would once more
ease monetary policy. The median forecast in the poll showed the
two-week repo rate would fall to a record low of 1.25 percent at
the end of 2009.
The main rate used to drain excess liquidity is at 1.5
percent now, after a quarter point cut in May.
The overall fiscal deficit was projected at 4.9 percent of
GDP this year, below the Finance Ministry's official forecast
for 5.1 percent, and far above a euro entry cap of 3 percent.
The poll also forecast the crown currency, which has
recovered from a drop early this year, would firm to 25.3 to the
euro <EURCZK=> by the end of the next year from Tuesday's 26.78.
(Editing by Ruth Pitchford)
