PRAGUE, Jan 15 (Reuters) - The Czech current account posted
a deficit of 8.72 billion crowns ($420.4 million) in November,
just below a market forecast of a 9.05 billion crown gap, data
showed on Thursday.
The 12-month rolling deficit rose to 104.3 billion crowns,
or 2.96 percent of 2007 estimated gross domestic product (GDP),
according to Reuters calculations.
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KEY POINTS:
(CZK billions) Nov Oct Nov forecast
Current Account -8.72 -21.99 -9.05
Financial Account 17.22 11.61 n/a
Net Direct Investment 8.92 17.36 n/a
(For full table, double click on [])
COMMENTARY:
JAROMIR SINDEL, CHIEF ECONOMIST, CITIBANK
"The financial account reflects a previous outflow shown
also in the October data, an outflow from Czech bonds and
equities."
"The overall improvement on the financial account only comes
from short-term assets of banks that are relatively volatile..."
"Although the current account was better than in the
previous month, it is still obvious that it is worsening on the
annual (comparison) and it shows that in 2009 (there will be a
need for) external financing ... of the current account ...
which is slightly negative for the crown."
PAVEL SOBISEK, CHIEF ECONOMIST, UNICREDIT, PRAGUE
"The deficit appears to be relatively mild, which we expect
to result from a mild outflow of dividends. But it is only one
month, and I would not read too much into that."
"There are two contradicting factors (on the outlook). One
being that profits of companies operating on the Czech market
are going down, meaning the potential for outflow of dividends
is lower as well. The second factor is the trade balance, which
is going to deteriorate slightly even though the potential for
deterioration is small."
"We forecast current account deficit relative to GDP at 3
percent this year, which is not too bad and even slightly better
than estimates for 2008."
- The deficit was due to a 15.0 billion crown shortfall on the
income balance (dividend payments).
- The trade balance and the service balance ran a surplus under
the balance of payments methodology. The balance of current
transfers included a deficit of 1.6 billion crowns on transfers
from the Czech Republic to the EU budget. As for the capital
account, a net total of 0.8 billion crowns was drawn from the EU
budget.
- Capital inflows on the financial account were around 17.22
billion crowns under ECB methodology.
- The net outflow of direct investment was 8.92 billion crowns,
of which net estimated reinvested earnings were around 9 billion
crowns. The outflow of portfolio investment amounted to 36.58
billion crowns, was due to a decrease in holdings of local
currency bonds and equity securities by non-residents.
- The annual net direct investment inflow total has been
increasing slightly.
- The annual net portfolio investment switched to a deficit.
- Other investment showed a surplus of 42.23 billion crowns,
owing to a change in the short-term international position of
banks (a decline in short-term assets in particular). The CNB's
international reserves (adjusted for valuation changes) recorded
a deficit of 2.6 billion crowns (a decline in reserves).
BACKGROUND:
- Analyst expectations before data release []
- Czech Nov foreign trade figures []
- Polish Oct C/A []
- Slovak Oct C/A gap []
- Hungary's Q3 C/A gap []
- Report on last Czech c.bank rate decision.......[]
[] [] []
LINKS:
- For further details on November 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 Patrick Graham)
