INSTANT VIEW 4-Czech GDP falls more than expected in Q4 q/q

                                
 PRAGUE, March 11 (Reuters) - Czech economic growth fell by
0.9 percent in the last three months of 2009 when compared with
the previous quarter, data showed on Wednesday, indicating a
worse-than-expected contraction had hit the emerging economy.
                                
 The Czech economy grew by a real 0.7 percent on an annual
basis in the fourth quarter, the statistics office said. It was
below the 1.0 percent flash estimate released on February 13.
                                
 The previously reported estimate for quarter-on-quarter
growth was 0.6 percent.
                                
 The Czech figures lagged those of neighbouring Slovakia,
which posted 2.5 percent year-on-year growth in the last three
months of 2008, and Poland's 2.9 percent. But it was above
Hungary's 2.3 percent drop [ID:nBUD002833].
                                
 The statistical bureau also cut its third-quarter growth
estimate to 2.9 percent, from 4.2 percent. The second quarter
was revised down to 4.0 percent from 4.6 percent.
****************************************************************
KEY POINTS:
(pct change)           Q4/08      Q3/08      Q4/07      2008
Real change yr/yr   0.7 (1.0)  2.9 (4.2)     5.5      5.9 (3.5)
                                
 NOTE. GDP was down 0.9 percent quarter-on-quarter when
adjusted for seasonal factors and the difference in working
days, down from previously reported -0.6 percent.

CENTRAL BANK FORECAST: Fourth-quarter GDP growth of 2.0 percent,
released in its most recent projection unveiled in February.

 (For full table of Q4 GDP data................[ID:nPRA002417])

 - The global crisis resulted in a significantly different
development from what was expected, the office said. 
 - The result was helped by a higher value added production,
although a drop in value added tax put brakes on growth.
 - Foreign trade result weighed on the final quarter after three
strong results in previous quarters.
                                
 
                                
 COMMENT
                                
 PETR DUFEK, ANALYST, CSOB                         
                                
 "The downward revision is significant, so overall it is
obvious that the economy has been hit by the recession in Europe
to a greater degree."
                                
 "Nearly zero annual growth at the end of the year is only a
confirmation that the Czech Republic is entering a recession."
                                
 "From the markets point of view, today's news is interesting
mainly in connection with the central bank, which has already
started talking about raising rates."
                                
 "We are now on the downward path, and the bottom is far
away. Inflation is falling and the crown will gradually recover,
so rates will go down in the course of time."
                                
 
                                
 PAVEL SOBISEK, CHIEF ECONOMIST, UNICREDIT, PRAGUE
                                
 "The opinion from the market that the flash estimate would
be revised downward was confirmed... including the overall 2008
figure."
                                
 "The Czech Republic is one of the CEE countries where
year-on-year growth was positive -- together with Poland and
Slovakia -- which was positive. On the other hand, it is
apparent that the recession will only peak later, most likely in
the first quarter this year."
                                
 "There is no reason for the market to react positively."
                                
 
                                
 HELENA HORSKA, ECONOMIST, RAIFFEISEN
                                
 "The economy was kept above the level of recession thanks to
household consumption, mainly food and telecommunication
services and fuels. The influence of an emerging recession
abroad has marked the contribution of foreign trade and
industrial output (that) have been so far the driver of growth."
                                
 "The worsening economic situation of big global economies
and our trading partners, mainly Germany, increases concerns of
a deeper slowdown in the Czech economy. The economy will likely
drop by more than 2 percent (this year). 
                                
 
                                
 JAROMIR SINDEL, ECONOMIST, CITIBANK  
                                
 "The downward revision was no significant surprise...
Revision in the third quarter could be expected on the basis of
the fourth quarter numbers. From this point of view, it is in
line with expectations."
                                
 "It has been confirmed that the Czech economy is slowing
down and entered a recession in the fourth quarter, (and it) is
here to stay at least in the first half of the year and probably
a bit longer in 2009."
                                
 
                                
 DAVID MAREK, CHIEF ECONOMIST, PATRIA FINANCE
                                
 "It was slightly expected because the first forecast was
based without fresh figures from exports, industrial output or
retail sales."
                                
 "What is slightly surprising was a downward revision in the
third quarter, so the situation is even worse than we expected
and the recession is deeper. And nobody knows how deep it can be
and how long it can last. So it's a negative message."
                                
 "As for monetary policy, I would not expect any impact
because there is threat of exchange rate volatility, which is a
constraint for cutting interest rates."
                                
 
BACKGROUND:
- For story on analysts' expectations before the data release,
double click on...................[ID:nL9332122].[ID:nLD132208]
- Slovak Q4 GDP..................................[ID:nL5222907]
- Poland's Q4 GDP................................[ID:nL2411231]
- Hungary's Q4 GDP..............................[ID:nxxxxxxxxx]

LINKS:
- For further details on four quarter GDP and past data, Reuters
3000 Xtra users can click on the Czech Statistical Bureau's
website:
                                
 http://www.czso.cz/eng/csu.nsf/kalendar/2004-hdp

- 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)