INSTANT VIEW 2-Czech July C/A shows CZK3.1 bln gap,below fcast

                                
 PRAGUE, Sept 11 (Reuters) - The Czech current account showed
a 3.06 billion crown ($175.5 million) deficit in July, smaller
than the 6.0 billion gap forecast by analysts, data showed on
Friday.
                                
 A major factor was a steep drop from June in dividend
outflows.
                                
 The income balance showed a 18.25 billion crown gap, above
last year's 16.12 billion but much smaller than the 41.26
billion gap in June.
                                
 It reflected a dividend payment of 12.6 billion crowns from
Czech subsidiaries to their foreign parent firms and estimated
reinvested earnings of 8.7 billion crowns, the central bank
said. 
                                
 The 12-month rolling deficit dipped to 91.8 billion crowns
($5.26 billion), or 2.5 percent of 2008 gross domestic product
(GDP), according to Reuters calculations.
****************************************************************
KEY POINTS:
(CZK billions)           July          June        July forecast
Current Account          -3.06        -18.79        -6.0
Financial Account        11.57         31.20         n/a
Net Direct Investment    12.42         -2.95         n/a

 (For full table, double click on [ID:nPRA004758])
                                
 
- The balances of goods and services both ran a surplus. 
- The balance of current transfers includes a deficit of 1.4
billion crowns on transfers from the Czech Republic to the EU
budget.
- The capital account includes receipts from the sale of
emission certificates and drawings of 0.1 billion crowns from
the EU budget.
- Capital inflow on the financial account was around 11.6
billion crown under ECB methodology.
- The net inflow of direct investment was 12.4 billion crowns,
the highest surplus so far this year.
- It was due to investment of foreign parent firms in capital of
domestic corporations, estimated reinvested earnings for foreign
owners and net credit payments to domestic corporations within
lending transactions in the group.
- The portfolio investment outflow of 3.5 billion crowns was due
to the sale of part of government bonds by foreign investors. 
- The annual current account deficit total has been decreasing
modestly.
- Other investment showed a 7.6 billion crown surplus, due to a
change in the short-term international position of banks (a
decline in short-term liabilities). The central bank's
international reserves (adjusted for valuation changes) rose by
4.9 billion crowns owing to transactions.
                                
 
  COMMENTARY:
                                
 VOJTECH BENDA, SENIOR ECONOMIST, ING, PRAGUE
                                
 "For the time being the current account poses no risk for
the crown... The income balance (deficit) is decreasing...it is
the main driver of the (overall) deficit."
                                
 "We assume that net financing of the balance of payments,
which includes the current account plus net direct investments,
should remain in the positive also in the following two to three
quarters mainly thanks to a bigger surplus on the trade
balance."
                                
 "This should help the crown appreciate."
                                
 
                                
 PAVEL SOBISEK, CHIEF ECONMIST, UNICREDIT, PRAGUE
                                
 "The surplus on the financial account covers the current
account deficit several times, so there is no threat of external
imbalance."
                                
 
  MARKET REACTION:
                                
 Czech crown unchanged after the data at 25.47 to the euro
<EURCZK=>.
                                
 
  BACKGROUND:
- Analyst expectations before data release        [ID:nL2480068]
- Czech July foreign trade figures                [ID:nL7161509]
- Polish June C/A data                           [ID:nC62461938]
- Slovak June C/A data                           [ID:nBSD000222]
- Hungary's Q1 C/A gap                            [ID:nLU713285]
- Report on last Czech c.bank rate decision.......[ID:nL6146715]
                                
 [ID:nL655323] [ID:nPRG001524] [ID:nL6221606] [ID:nPRA004692]

LINKS:
- For further details on July 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>
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- Key data releases in central Europe    [CEE-CONVERGENCE-WATCH]
- 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)