* Czech foreign trade on Sept 7, CPI Sept 9
* Exports, imports to tumble but recovery seen by year end
* For table with complete forecasts, click on []
By Mirka Krufova
PRAGUE, Sept 2 (Reuters) - The Czech foreign trade surplus
likely halved in July from June, with exports and imports
plunging at a double digit pace like in most of the year so far,
a Reuters poll showed on Wednesday.
But analysts said the steepest falls were over and volumes
should recover thanks to a rebound in Germany.
Czech foreign trade, the backbone of the country's growth,
has suffered after an economic crisis crippled Western demand
for the country's industrial production, centred on cars and
electronics.
Exports and imports have both been falling at a double digit
pace each month since January, only March exports fell less.
The median forecast in a poll of 14 analyst groups showed
July foreign trade <CZ/ECON04> <CZ/ECON15> would record a 9
billion crown ($500 million) surplus, from 20.43 billion in
June, and above the 6.8 billion surplus for the month last year.
Exports were seen plunging by 17.6 percent on the year and
deeper than the 15.1 percent decline in June but less than in
May and April.
Imports likely slumped by 20 percent after June's 19.3
percent, but less than the April and May's declines of over 20
percent.
"The annual numbers still (show a) rather deep drop but the
plunge in volumes has more or less stopped in the first half of
the year," said Miroslav Plojhar, EMEA economist at JP Morgan.
The steep annual declines were due to the high comparative
base as the rapid contraction began only at the end of the last
year, he said.
"Numbers coming... from abroad indicate that the slump on a
consecutive base has stopped... (but) no strong rebound can be
yet observed," he said.
"But (after) Germany goes up, the rebound should come rather
quickly," and could show by the end of the year, he said.
An end of a scrap subsidy scheme in Germany, Czechs' main
trading partner, should have a negligible effect on Czech
exports as an overall demand in the western economy picks up,
said Pavel Sobisek, a chief economist at Unicredit in Prague.
The payment for removing old cars and purchasing new ones
had helped moderate a Czech industrial production tumble in past
months.
August inflation was seen unchanged from July at 0.3 percent
year on year, the smallest growth since September 2003, and
below the central bank forecast for a 0.5 percent growth.
"We expect annual inflation to remain unchanged in August at
0.3 percent," said Radomir Jac, a chief economist at Generali
PPF Asset Management.
"A slight pro-inflationary impact of food and automotive
fuel prices should be neutralized by tobacco prices where last
year's impact of excise tax hike on annual inflation has been
gradually falling away," he said.
Jac forecasts price growth to hit its lowest in September
and October with a 0.2 percent growth and then rebound to reach
around 1 percent, pulled up by food and fuel prices.
Core inflation should remain dampened due to weak household
consumption as high unemployment hits household incomes, Jac
said.
The central bank targets consumer inflation at 3 percent +/-
one percentage point. Low inflation along with a steep slowdown
in growth prompted the bank cut interest rates to a record low
of 1.25 percent.
(Additional reporting and writing by Jana Mlcochova; Editing
by Andy Bruce)
