INSTANT VIEW 4-Czech March trade shows record surplus

                                
 PRAGUE, May 7 (Reuters) - The Czech foreign trade balance
posted a record surplus of 23.4 billion crowns ($1.17 billion)
in March, more than triple analyst forecasts in a Reuters poll,
data showed on Thursday.
                                
 The result was largely due to plummeting imports, down 19.8
percent on versus the same month a year earlier. Exports also
fell, but at a much slower pace of 13.2 percent.
                                
 Analysts said exports appeared to have been lifted by a car
scrap subsidy, in which the governments in countries like
Germany government are giving cash handouts to consumers to turn
in their old cars and buy new ones.
                                
 At the same time, the economic crisis has also depressed
imports because consumers are buying fewer foreign-made goods.
                                
 Manufacturing-heavy Czech Republic, along with its
neighbours Poland, Hungary, and Slovakia, have seen steep falls
in industrial production, mainly due to a collapse in demand in
their main market, the euro zone.
                                
 
**************************************************************
KEY POINTS:
(in bln CZK)           March        Feb          March fcast
 balance               23.4         8.70           7.0
(nominal y/y change in pct)
 exports               -6.3       -22.2             n/a
 imports              -13.5       -21.5             n/a

 (For full table of trade data, click on........[nPRA002547])

- According to seasonally-adjusted preliminary data, exports
rose 5.1 percent in March from February, while imports slipped
0.9 percent month-on-month.
- In euro terms, exports fell 13.2 percent and imports dropped
19.8 percent year-on-year in March.
                                
 The Czech crown <EURCZK=> was unchanged after the release of
the data at 26.61 to the euro.

                                
 COMMENT:
                                
 HELENA HORSKA, ECONOMIST, RAIFFEISENBANK
                                
 "The record number is the result of thhe combined effects of
the scrap subsidy in European states and a weakening in imports
to the Czech Republic due to low production and falling
consumption."
                                
 "It is a very positive news for the crown."
                                
 
                                
 MARTIN LOBOTKA, ECONOMIST, CESKA SPORITLENA
                                
 "The main thing is the scrap subsidy, as the drop in exports
of cars and machinery is significantly smaller than in the last
months. There is also an improvement in the balance of trade
with fossil fuels, thanks to the brutal annual move in fuel
prices."
                                
 "It's not going to have an impact on today's central bank
decision. They are unlikely to interpret this one number as a
recovery, as they will see the improvement is mainly due to the
scrap subsidy."
                                
 
                                
 DAVID MAREK, CHIEF ECONOMIST, PATRIA FINANCE
                                
 "The data is influenced by the introduction of scrap subsidy
abroad, mainly in Germany and Slovakia, which may have mitigated
a drop in exports."
                                
 "On the other hand a recession is showing in domestic
demand, which has led to a drop in exports, so the two effects
combined lead to the fact that the foreign trade balance
improved significantly."
                                
 
                                
 BACKGROUND:
- Market expectations before release              [ID:nLT483858]
- Slovak February trade figures                   [ID:nL9336792]
- Report on last Czech c.bank rate decision.......[ID:nLQ281341]
                                
                 [ID:nLQ963361] [ID:nL369877] [ID:nPRA002453]

- For further details on March foreign trade and other past
data, Reuters 3000 Xtra users can click on the Czech Statistical
Bureau's website:
                                
 http://www.czso.cz/eng/csu.nsf/kalendar/2004-vzo

- For LIVE Czech economic data releases, click on       <ECONCZ>
- Instant Views on other Czech data click on        [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 Jason Hovet)