INSTANT VIEW 4-Czech June C/A gap 3 times bigger than fcast

                                
 PRAGUE, Aug 12 (Reuters) - The Czech current account posted
a deficit of 27.02 billion crowns ($1.67 billion) in June, more
than three times larger than the market forecast of a 9.0
billion crown gap due to dividend outflows, data showed on
Tuesday.
                                
 The 12-month rolling deficit widened month-on-month to 92.0
billion crowns, or 2.6 percent of last year's estimated gross
domestic product (GDP), according to Reuters calculations.
****************************************************************
KEY POINTS:
(CZK billions)           June         May          June forecat
Current Account         -27.02       -11.68         -9.0
Financial Account        36.09         3.09          n/a
Net Direct Investment    11.82        13.16          n/a

 (For full table, double click on [nPRA002070])

COMMENTARY:
                                
 JAN VEJMELEK, HEAD OF ECONOMIC AND STRATEGY RESEARCH,
KOMERCNI BANKA:
                                
 "Earlier data on June foreign trade were significantly
better than the market had expected. Therefore we had assumed
that the current account would also be a positive surprise. That
did not happen. The reason is huge income balance deficit
related to dividend payments abroad."
                                
 
                                
 JAN CERMAK, ANALYST, CSOB:
                                
 "The deficit was high because of the strong dividend
outflows. It is surprising the deficit is so high given the
performance of the Czech crown in this month. Probably huge
inflows of short-term capital helped the crown. It is a
disappointing figure but I still think the current account is
okay given strong FDI (foreign direct investments) inflows and
the trade balance."
                                
 
                                
 DAVID MAREK, CHIEF ECONOMIST, PATRIA FINANCE:
                                
 "The numbers are surprisingly negative and that is mainly
due to high dividend outflow.
                                
 "The second factor influencing the balance of payments was
the (government) eurobond issue.
                                
 "I believe the data should support an expected correction of
the exchange rate toward weaker levels, as the income balance
deficits will rise in relation to the trade surpluses."
                                
 
MARKET REACTION:
                                
 Crown marginally weaker at 24.162 to the euro <<EURCZK>
after the data from 24.150 before the data.
                                
 
- The monthly current account deficit is mainly due to a deficit
on the income balance.
- The trade balance and the services balance ran a surplus. The
balance of current transfers includes a deficit of CZK 1.3
billion on transfers from the Czech Republic to the EU budget.
-  On the capital account, a net total of CZK 2.2 billion was
drawn from the EU budget.
- Net foreign direct investment inflows totalled 11.8 billion
crowns, of which net estimated reinvested earnings were around
CZK 9.2 billion.
- Portfolio investments were a net 42.3 billion crowns
primarily due to an issue of government bonds abroad.
- Other investments showed a 17.5 billion deficit.
 
BACKGROUND:
- Analyst expectations before data release        [ID:nL9319630]
- Czech June foreign trade figures                [ID:nL4690763]
- Polish May C/A                                 [ID:nL15461365]
- Slovak May C/A gap                             [ID:nBSD000092]
- Hungary's Q1 C/A gap                           [ID:nL30154818]
- Report on last Czech c.bank rate decision         [ID:nL74314]
                                
                               [ID:nL7705441] [ID:nPRA002063]
 
LINKS:
- For further details on June 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                 [CZ/INSTANT]
- Overview of Czech macroeconomic indicators            [CZ/ECI]

- 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; Editing by Michael Winfrey)