Tuesday, February 12, 2008

Czech Current Account Deficit December 2007

The Czech monthly current-account deficit was the largest since last August in December as an increased number of foreign companies in the Czech Republic repatriated profits.

The monthly shortfall was 20.1 billion koruna ($1.14 billion), compared with a 1.2 billion-koruna deficit in November and a 13.2 billion-koruna gap a year ago, the Prague-based central bank said today.

The Czech current-account balance normally fluctuates according to when foreign investors collect locally earned dividends and profit, which are increasing rapidly as the Czech economy experiences economic growth of around 6 percent for a third consecutive year. With the full-year trade surplus having doubled, it is a good guess that the 2007 current-account deficit will have shrunk to something just under 3% of GDP - 2.8 percent perhaps.

The full-year current-account deficit reached 106.6 billion koruna.

The deficit on the income balance, which includes dividend payouts abroad as well as estimated reinvested earnings by foreigner investors, rose to 24.7 billion koruna in December and to 24.7 billion koruna for the whole of 2007.

The December goods trade surplus was reported as being 1.5 billion koruna, (this compares with a 1.1 billion-koruna surplus estimated by the statistics office last week). The surplus in services trade shrank to 3.7 billion koruna from 5 billion koruna in November, the central bank said.

The financial account for December 2007 showed a surplus of 7 billion koruna. The 12-month figure was 78 billion koruna, and failed to cover the cumulative current-account deficit. The country attracted net foreign direct investment of 18.1 billion koruna in December, a 60 percent increase over November. The central bank estimated reinvested profits at 10.8 billion koruna.

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