Strong growth unlikely soon,despite signs-CNB Tuma

Tuma's comments came after the Czech Statistical Office said earlier that Czech gross domestic product grew 2.2% in the third quarter on the year. "I continue being an optimist. There have been many positive signals this year," Tuma told an assembly of economists and entrepreneurs. "But I'm far away from stating that we have the solid fundaments of robust growth."

Tuma reiterated previous concerns about the Czech economy, including expanding external deficits, the risk of higher wages in inefficient sectors of the economy and increasing public financing deficits.Tuma admitted that higher external deficits were being fueled to a large extent by direct foreign investment, but said it was too soon to conclude that high imports, likely of machinery and production goods, are now creating a base for future growth.

"We can assume that the higher effectiveness of exports in the future is related to relatively high imports. However, this is just a thesis," Tuma said. "Without doubt, the relationship between direct foreign investment, the current trade deficit and a possible future acceleration of economic growth needs to be proven."

On public finances, Tuma reiterated the need for fundamental reform to sustain growth. But he said that the central bank is carefully analysing the current public deficits. "We are trying to understand, to what extend these deficits are expansive, to what extend they effect aggregate demand, or how possibly they can be reflected in macroeconomic stability - either in inflation, or the current account," Tuma said.Tuma said that he doesn't see wage developments jeopardizing inflation. "But we should be aware of the risk of spilling wage growth into those sectors where productivity isn't sufficient," he said.