Czech Sept current account deficit dives to half of forecast UPDATE |
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Tue, 13 Nov 2007 11:28
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(adds more details, analyst comment)PRAGUE (Thomson Financial) - Czech Republic's current account deficit shrank to 5.8 bln crowns in September, from 35.65 bln crowns in August, and was far lower than a consensus forecast of 11 bln crowns, data released by the Czech central bank showed.The deficit was due to a 24.5 bln crown income balance gap caused by the outflow of dividends and estimated reinvested profit on direct investments.The financial account posted a surplus of 9.5 bln crowns as net direct investments balance reached a surplus of 11.8 bln crowns, while portfolio investments balance showed a 9.3 bln crown gap, data showed.'Preliminary figures for the third quarter show that the current account deficit is not improving but is worsening. The reason is the growing deficit of investment income balance,' said Helena Horska, an analyst at Raiffeisen.'Due to the expected decline in trade balance surplus and a further rise in an outflow of profits abroad, we expect the rise in current account deficit this year to 3.3 pct of gross domestic product (GDP), and next year to 3.6 pct,' she added.The news is neutral for the crown, Horska said, adding that the recent strong gains for the crown are not justifiable by flows of trade, services, and dividend in and out of the country as measured by the current account indicator.'Current account balance is leading to a deeper deficit and the inflow of money from abroad is rising only slowly,' she said, adding she expects the crown to correct to levels of 27 to the euro.jana.mlcochova@thomson.compjg/slm/jm1/lhtCOPYRIGHTCopyright Thomson Financial News Limited 2007. All rights reserved.The copying, republication or redistribution of Thomson Financial News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Financial News.
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Czech Sept current account deficit dives to 5.8 bln crowns, half of forecast 