PRAGUE, April 13 (Reuters) - The Czech current account
showed a 15.95 billion crown ($944.9 million) surplus in
February, a turnaround from a 0.31 billion crown gap in January,
the central bank said on Wednesday.
The result far exceeded analyst expectations for a 3.2
billion crown surplus, mainly due to an upswing in the inflow of
funds from European Union subsidy programmes.
The data was released under a new methodology introduced as
of January's data, in reaction to changes in trade reporting by
the country's statistics office. So far, the change has resulted
into a reduction in merchandise trade surpluses.
The surplus in February was due to surpluses on the balance
of goods and services and the balance of current transfers.
The rolling 12-month deficit narrowed to 144.45 billion
crowns, equal to about 3.9 percent of the latest 2010 gross
domestic product estimate, according to Reuters calculations.
The data also showed the net inflow of direct investment
reached 6.2 billion, of which net reinvested earnings were 5.6
billion crowns.
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(For a TABLE, double click on []
COMMENTARY:
JAROMIR SINDEL, CHIEF ECONOMIST, CITIBANK
"The result was strongly affected by the inflow of EU funds.
EU funds are transferred off the market. FDI continue to be
weak, there is no FX flow, and portfolio investments were rather
negative...which shows smaller interest in Czech bonds."
"This is not some extra positive news for the Czech crown
because, as I said, the EU funds go mostly off the market."
"But as for the crown's vulnerability with regards to the
recent revision, the crown remains in the basket of the
relatively safe currencies."
HELENA HORSKA, ANALYST, RAIFFEISENBANK
"European funds and a touch lower estimated income outflow
ensured a surprisingly high surplus. Against last February, the
surplus is about 10 billion crowns higher due to current
transfers (funds from the European budget were in the amount of
10.7 billion)."
"The financial account also ended in surplus thanks to lower
outflow of portfolio investments. Foreign exchange reserves of
the national bank therefore rose by more than 19 billion."
"Despite the positive surprise we can not expect a more
significant impact on the crown. The crown is not traded with
too much activity -- it is waiting for some stronger impulse,
but current account is not it."
PETR DUFEK, DIRECTOR OF MACROECONOMIC ANALYSIS, CSOB:
"The February result surprised by a high surplus, mainly due
to drawing of funds from the European Union.
"This is a temporary factor deviating monthly figures. In
the full-year horizon current account will be under the
influence of trade surpluses and an outflow of dividends.
"I expect a full-year deficit of about 3.5 percent of gross
domestic product, which should be easily fundable without an
impact on the exchange rate."
DAVID MAREK, CHIEF ANALYST, PATRIA FINANCE
"The number is surprisingly high. The trade balance has
reached a relatively high surplus, which, under the new
methodology, we expected somewhat lower."
"On the income balance, the deficit is moderate for the time
being because the dividend season has not started properly yet."
"The statistics will not have a major impact on the crown
trade."
MARKET REACTION:
The crown was flat at 24.419 to the euro <EURCZK=> after the
data.
DETAILS:
- Trade balance in current account showed a 8.36 billion
surplus, versus 1.99 billion surplus showed in the new
statistics used by the statistical bureau.
- The amount of dividends paid was 0.1 billion crowns in
February.
- The balance of current transfers includes a surplus of 10.7
billion crowns on transfers from the EU budget to the Czech
Republic. No revenues from the EU budget were recorded on the
capital account.
- Capital inflow on the financial account was 3.3 billion
crowns.
- The net portfolio investment outflow comprises purchases of
equity and debt securities by residents abroad. The liability
side includes foreign bonds issued by a state-controlled entity,
power firm CEZ <>, totalling 11.5 billion yen.
- The foreign issue was offset by lower government
crown-denominated bond holdings by non-residents.
- The longer-term trend of the annual net direct investment
inflow total has been rising moderately.
- The annual net portfolio investment total has been showing a
longer-term gradual decline in inflow of funds.
- Other investment ran a surplus of 10.2 billion crowns, owing
to a change in the short-term international position of banks.
- The Czech central bank's international reserves rose by 5.7
billion crowns, adjusted for valuation changes.
NOTE: In line with the start of publication of national
external trade statistics, the central bank (CNB) has begun to
release its national presentation of the annual balance of
payments data.
The crux of the change is the exclusion of branding, i.e.
margin payments to non-residents registered in the Czech
Republic solely for VAT payment, from the cross-border goods and
services trade statistics.
In addition, the method for calculating direct trade costs
has been adjusted and a new procedure for calculating the
balance of services has been implemented. The CNB will continue
to release national balance of payments data only.
Economists are scrutinising Poland's current account data
after the head of the central bank's statistics branch said it
would revise the 'errors and omissions' section in a way that
would increase the deficit by at least 1 percent of GDP.
[]
Poland will release its February balance of payments data at
around 1200 GMT.
BACKGROUND:
- Czech February foreign trade figures []
- Polish January C/A data []
- Slovak January C/A data []
- Hungary's Q4 C/A data []
- Report on last Czech c.bank rate decision......[]
[] [] []
LINKS:
- For further details on February 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)
