Czech current account deficit widens unexpectedly in September

By bne IntelliNews November 13, 2014

The Czech current account deficit widened to CZK21.05bn (€762mn) in September from CZK15.54bn the month before, data from the central bank showed on November 13. The deterioration reflects deficits on primary and secondary incomes. The reading missed market expectations as analysts were expecting the shortfall to shrink to CZK9bn.

Trade in goods and services registered a surplus of CZK28.5bn in September, well above the CZK9.7bn surplus a month earlier. The primary income ran a deficit of CZK46.7bn in September, wider than the CZK22.3bn gap in the previous month mainly due to dividends paid on direct investment totalling CZK36.7bn, the central bank said. Primary and secondary income included a deficit of CZK1.2bn on transfers from the Czech Republic to the EU budget.

On an annual basis, the Czech current account also deteriorated as in September 2013 it posted a deficit of CZK11.6bn. The 12-month rolling deficit stood at CZK21.4bn, equalling to 0.5% of the full-year GDP forecast, according to IntelliNews calculations.

According to the finance ministry’s October macroeconomic forecast, the current account of the balance of payments should be balanced this year, after posting a deficit of 1.4% of GDP in 2013.

Balance of Payments (CZK mn)                      
  Jan/14 Feb/14 March/14 April/14 May/14 June/14 July/14 Aug/14 Sept/14 Jan-Sept/14 Sept/13
I Current Account 28 243 24 151 25 418 -39 437 11 455 -1 630 -15 378 -15 536 -21 048 -3 763 -11 642
A. Goods and services 28 823 27 995 38 246 28 849 25 921 30 400 20 428 9 658 28 541 238 860 19 196
B. Primary income 5 550 1 448 -7 609 -79 045 -19 688 -29 312 -32 053 -22 304 -46 686 -229 698 -29 589
C. Secondary income -6 129 -5 292 -5 220 10 759 5 222 -2 718 -3 753 -2 891 -2 903 -12 925 -1 250
II Capital Account 0 44 21 243 0 0 705 1 930 0 -53 23 869 2 104
III Financial Account 26 905 26 487 21 255 -15 787 -12 516 9 776 -24 918 -11 525 -20 088 -411 -4 888
1. Direct investment -7 331 -10 809 -11 380 -73 255 -21 331 35 999 -22 882 -8 129 -2 005 -121 122 -10 332
2. Portfolio investment -3 479 -4 333 -8 234 27 090 15 496 38 891 6 485 10 328 -10 097 72 147 -720
3. Financial derivatives -507 -846 -1 411 -681 -1 379 1 557 -967 -440 843 -3 830 -370
4. Other investments 17 382 45 534 34 980 18 211 -9 526 -82 376 2 398 -10 390 -7 228 8 986 7 538
5. Reserve assets 20 840 -3 060 7 300 12 848 4 223 15 705 -9 953 -2 894 -1 602 43 408 -1 004
Source: Czech central bank                      
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