PRAGUE, Dec 12 (Reuters) - The Czech current account posted
a deficit of 21.99 billion crowns ($1.12 billion) in October,
bigger than the market forecast of a 15.30 billion crown gap,
data showed on Friday.
The 12-month rolling deficit jumped on a month-on-month
basis to 95.6 billion crowns, or 2.7 percent of last year's
estimated gross domestic product (GDP), according to Reuters
calculations.
The data followed much worse-than-expected figures for Czech
industrial production for October released earlier on Friday.
Those numbers showed an annual fall of 7.6 percent in output,
the worst performance since at least 2001.
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KEY POINTS:
(CZK billions) Oct Sept Oct forecast
Current Account -21.99 -12.10 -15.30
Financial Account 11.61 24.88 n/a
Net Direct Investment 17.36 16.41 n/a
(For full table, double click on [])
COMMENT
HELENA HORSKA, ANALYST, RAIFFEISENBANK
"A slump in foreign trade has significantly impacted the
October current account balance."
"The October deficit... is the second highest reported this
year."
"The capital flow in the Czech Republic in October was
affected by the acute global financial crisis."
"However, even in the case of a drop in interest in
investments in central and eastern Europe, the Czech Republic
should not have a problem covering such a low current account
deficit, the lowest in the region."
PAVEL SOBISEK, ANALYST, UNICREDITBANK
"The income balance shows foreign companies transferred, in
the form of dividends, everything that was possible, undoubtedly
to boost gloomy balances of their parent companies abroad."
"I would not make such a strong conclusion that today's data
(including PPI and industrial output) show the country is on its
way to a recession, although a recession of course is not
excluded."
- The deficit was due to a 24.53 billion crown deficit on the
income balance (dividend payments).
- The trade balance ran a slight deficit, while the balance of
services ran a surplus. The balance of current transfers
included a deficit of CZK 2.5 billion on transfers from the
Czech Republic to the EU budget. As for the capital account, a
net total of CZK 0.66 billion was drawn from the EU budget.
- Capital inflow on the financial account was around CZK 11.61
billion under ECB methodology.
- The net inflow of direct investment was CZK 17.36 billion, of
which net estimated reinvested earnings were around CZK 9
billion. The outflow of portfolio investment amounted to CZK 3.63
billion, owing to a decline in holdings of Czech government
bonds by non-residents, which was partly offset by sales of
foreign securities from portfolio of Czech entities.
- The annual net direct investment inflow total has been
increasing slightly.
- Other investment showed a deficit of CZK 0.24 billion, due to
a change in the short-term international position of banks. The
government sector drew on an EIB loan of CZK 1.0 billion.
BACKGROUND:
- Analyst expectations before data release []
- Czech Oct foreign trade figures []
- Polish Sept C/A []
- Slovak Sept C/A gap []
- Hungary's Q2 C/A gap []
- Report on last Czech c.bank rate decision........[]
[] [] []
LINKS:
- For further details on October 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)
