*WHAT: Jan foreign trade, Feb unemployment
*WHEN: March 8
*FCAST: Foreign trade in CZK10bln surplus
Unemployment up 10.0 pct
By Mirka Krufova
PRAGUE, March 3 (Reuters) - Both Czech imports and exports
probably rose in January, reversing a 15-month-long joint
contraction and showing recovery in the industry-heavy central
European country is gaining traction, a Reuters survey showed.
The small and open economy is forecast to eke out a small
expansion this year after shrinking for the whole of 2009, but
any sustainable recovery will hinge on a revival in the euro
zone, which draws most of the country's exports.
FOREIGN TRADE:
Fifteen analysts surveyed by Reuters produced a median
forecast for imports <CZFTB=ECI> to increase by 1.5 percent, the
first rise since October 2008.
A rise in imports indicates a pick-up in manufacturing, and
up to 80 percent of goods coming into the export-heavy Czech
Republic are re-exported as part of production sold abroad.
Exports, which account for 68 percent of the country's total
output, probably rose by 5.5 percent, the second straight rise.
The overall balance was forecast to end up in a 10 billion
crown ($523.3 million) surplus.
* Market reaction: A recovery in foreign trade could boost
the crown currency <EURCZK=> as it would suggest that economic
fundamentals in the export-reliant country are improving.
The unit has been slightly underperforming its regional
peer, the Polish zloty <EURPLN=>, as that country is expected to
show higher growth and the currency has more room to rebound
from steep losses in 2009.
UNEMPLOYMENT: Unemployment was seen rising to 10 percent in
February, its highest since March 2004. The persistent rise in
the jobless rate has smothered consumer demand and kept
demand-led price pressures subdued and inflation low.
Fourteen economists produced a median forecast <CZUNR=ECI>
of 10 percent unemployment in February, from 9.8 percent in
January.
The central bank forecasts the rate at 9.9 percent in the
first quarter and sees it peaking at 10.4 percent in a year's
time.
* Market reaction: If the unemployment number is better than
expected, it may point to a quickening recovery, although
unemployment data reflect economic developments with some delay.
BACKGROUND: The market expects the central bank to stay put
on rates in the first half due to weak price pressures and the
weak recovery, and start tightening policy later in the year.
The International Monetary fund (IMF) said on Tuesday Czech
monetary policy was appropriate for now but should shift to
tightening as soon as the recovery picks up. []
Gross domestic product <CZGDPQ=ECI> unexpectedly shrank by
0.6 percent in the last three months of 2009 in quarterly terms.
It fell by 4.2 percent in the full year. []
The statistics office will release detailed GDP data on
March 11.
For Czech March macro preview table: []
Czech stats office website: www.czso.cz
Czech labour and social affairs ministry www.mpsv.cz
All Czech economic data: <ECONALLCZ>
Central and Eastern Europe market report: <CEE/>
(Writing by Jana Mlcochova; editing by Stephen Nisbet)
