INSTANT VIEW 3-EU funds, low dividends help Czech Dec C/A

                                
 PRAGUE, Feb 11 (Reuters) - The Czech current account showed
a 0.69 billion crown ($38.83 million) deficit in December, much
narrower than expected by analysts thanks to transfers from the
EU and lower dividend payments, the central bank said on Friday.
                                
 Analysts in a Reuters poll had forecast a 12.85 billion
crown gap.
                                
 The balance of goods and services ran a surplus. The amount
of dividends paid was 4.2 billion crowns, the data showed.
                                
 The rolling 12-month deficit narrowed to 92.9 billion
crowns, equal to about 2.5 percent of estimated 2010 gross
domestic product, according to Reuters calculations.
                                
  The data also showed the net inflow of direct investment
was 4.9 billion, of which net reinvested earnings were 6.0
billion crowns. 
                                
 The capital inflow on the financial account was 16.0 billion
crowns under the ECB methodology.
****************************************************************
KEY POINTS:
(CZK billions)            Dec          Nov            Dec fcast
Current Account          -0.69        -1.98          -12.85
Financial Account        15.99        31.24           n/a
Net Direct Investment     4.93         2.88           n/a

 (For full table, double click on [ID:nPRA005457]
                                
 
 COMMENTARY:
                                
 JAROMIR SINDEL, CHIEF ANALYST, CITIGROUP, PRAGUE
                                
 "There was a significant inflow of money from the European
Union this month but it did not affect the market so there was
no significant impact."
                                
 "The FDI inflow was a little weaker so the question is what
was behind the strong inflow in the previous month, whether it
was mainly photovoltaic (power plants) or some other segments."
                                
 "Portfolio inflow continues to bring positive news... it
shows that companies and the government are able to get means
from abroad, which is positive."
                                
 
                                
 MIROSLAV FRAYER, ANALYST, KOMERCNI BANKA
                                
 "It was a nice surprise for the market. The total figure was
much better than the most optimistic forecast. This confirms
that the Czech Republic does not have any problems with external
imbalances. It is also positive for the Czech crown and we could
see some reaction."
                                
 "The main surprise (in the December data) was current
transfers which registered a surplus of almost 6 billion crowns.
But we also see quite good figures in trade balance, and these
balances together compensate deficits on balance of services and
income balances."
                                
 "The outlook is also quite positive for this year. We expect
some slight improvement, and the deficit should be slightly
lower."
                                
 
                                
 VOJTECH BENDA, CHIEF ECONOMIST, ING COMMERCIAL BANKING
                                
 "There were relatively high current transfers, ie transfers
from the European Union, which pushed it up. The income balance
is going down. There remains a surplus of direct investment, the
companies are not transferring everything away, there are
reinvested earnings."
                                
 
                                
 PETR DUFEK, HEAD OF MACROECONOMIC RESEARCH, CSOB
                                
 "The low current account deficit is attributable to
significantly lower dividends paid by foreign-controlled firms.
                                
 "For the full year, the deficit climbed to about 2.5 percent
of GDP from 1 percent a year ago. The main reason is much higher
inclusion of the so-called branding into services.
                                
 Without reinvestments, which remain in the Czech Republic,
the current account would be almost at zero.
                                
 
 DETAILS:
- The balance of current transfers includes a surplus of 8.6
billion crowns on transfers from the EU budget to the Czech
Republic.
 - The capital account includes transfers of about 6 billion
crowns from the EU budget.
- Credits from the sale of emission permits were 0.8 billion
crowns.
- The annual current account deficit total has been rising in
the longer run.
- The portfolio investment surplus picked up, owing among other
things to foreign bonds issued by state-owned entities totalling
350 million euros. This amount was partly offset by lower crown
government bond holdings by non-residents.
- Other investment ran a surplus of 6.6 billion crowns, owing to
a change in the short-term international position of banks. 
- Other sectors saw a decrease in foreign liabilities of
corporations.
- Client deposits with the central bank declined by 7.2 billion
crowns.
- The balance of transactions carried out for the central bank
clients (adjusted for valuation changes) resulted in a 4.6
billion crown rise in international reserves.
  
 BACKGROUND:
- Analyst expectations before data release       [ID:nLDE7111GF]
- Czech December foreign trade figures           [ID:nLDE7121DE]
- Polish November C/A data                       [ID:nLDE70C1IW]
- Slovak November C/A data                       [ID:nPRA005425]
- Hungary's Q3 C/A data                          [ID:nLDE6BT06X]
- Report on last Czech c.bank rate decision......[ID:nPRA005440]
 [ID:nPRG004706] [ID:nLDE71A071] [ID:nLDE712157] [ID:nPRG004674]
                                
                                              [ID:nLDE6A321Y]

 LINKS:
- For further details on December 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>
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- 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)