Economic Recovery To Keep C/A In Deficit

We hold to our forecast for the Czech Republic's current account deficit to widen slightly to 4.0% of GDP this year, from 3.8% in 2010. With the global economic recovery continuing apace, we expect the income deficit will again expand at a quicker rate than the merchandise trade surplus, maintaining the deficit at about the same level as last year. However, on the financial account, we highlight that the country remains vulnerable to bouts of investor risk aversion, threatening capital flows into the Czech Republic.

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