PRAGUE, March 13 (Reuters) - The Czech current account
posted a 4.8 billion Czech crown ($293.9 million) surplus in
January versus an expected 0.5 billion deficit, according to
data released on Thursday.
The 12-month rolling deficit narrowed month-on-month to 85.4
billion crowns, or 2.4 percent of last year's estimated gross
domestic product (GDP) according to Reuters calculations.
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KEY POINTS:
(CZK billions) Jan Dec Jan forecast
Current Account 4.82 -22.50 -0.5
Financial Account -3.14 21.35 n/a
Net Direct Investment 18.25 23.31 n/a
(For full table, double click on [])
- The monthly surplus is mainly due to a trade balance surplus
and positive balance of services
- The income balance gap stood at 12.89 billion crowns, which
includes the outflow of dividends but also estimated reinvested
earnings on direct investments.
- Gross foreign direct investment inflows total 18.97 billion
crowns, which the central bank estimated included about a gross
10 billion crowns in reinvested profits. Net FDI inflows reached
18.25 billion.
- Portfolio investments show a net 5.9 billion crown outflow,
mainly due to buying of foreign shares.
COMMENTARY:
VOJTECH BENDA, SENIOR ECONOMIST AT ING WHOLESALE BANKING
"The C/A development retrospectively justifies the previous
currency strengthening in the beginning of the year.
"Furthermore, it also signals the currency strength has not
weighted on the economy to the extent it was previously expected
to.
"Worth mentioning is yesterday comment of CNB's deputy
governor Singer, mentioning the positive C/A development as a
factor, which he will likely be taking into account at the next
bank board meeting. Hence, the better than expected C/A result
increases the probability the CNB could discuss seriously
eventual increase in rates already on March 25."
HELENA HORSKA, ANALYST AT RAIFFEISENBANK
"This is similar to last year when we started with a
surplus. (This is a) big surprise in the trade balance. Income
balance is usually lower at this point of the year.
"We are expecting deepening of the C/A deficit from 2.5
percent of to 3 percent of GDP this year.
This should have little impact on monetary policy and on the
currency. The figure is not so strong as to support crown at the
record levels."
DAVID MAREK, CHIEF ECONOMIST AT PATRIA FINANCE
"This was a slight surprise thanks to lower outflow of
dividends from the Czech Republic and a higher growth in the
services balance."
"The figure supports our view that GDP growth will be better
then forecast a few weeks ago. We see it at 5.5 percent this
year.
"The central bank has indicated it might start cutting
interest rates towards the end of the year, but the strong
growth could delay that move into next year."
MARKET REACTION
The Czech crown was mostly unmoved by the data.
BACKGROUND:
- Analyst expectations before data release []
- Czech January foreign trade figures []
- Polish December C/A []
- Slovak December C/A gap []
- Hungary's Q3 C/A gap []
- Report on last Czech c.bank rate decision []
[] []
LINKS:
- For further details on January 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 Chris Borowski; Editing by David Stamp)
