PRAGUE, Feb 11 (Reuters) - Czech industrial output plunged
by 14.6 percent year-on-year in December, worse than forecast
but decelerating slightly after falling at a record pace in
November, data showed on Wednesday.
Analysts had expected an 11.0 percent fall. Some economists
said the result indicated the Czech economy may have already
slid into contraction in the last quarter of 2008.
They also said that, despite comments from the Czech central
bank that its easing cycle may be nearing its bottom after it
cut interest rates last week to 1.75 percent, further loosening
could be needed to counter the economic downturn.
****************************************************************
KEY POINTS:
(y/y change in pct) Dec Nov Dec forecast
Industrial output -14.6 -17.4 -11.0
Industrial sales -13.7 -18.5 n/a
(Full table of data............................[])
- Seasonally adjusted output was down 0.5 percent
month-on-month.
- Seasonally adjusted output was down 17.2 percent year-on-year.
- Overall new orders fell 24.8 percent year-on-year, and new
orders from abroad decreased 29.2 percent.
COMMENTS:
HELENA HORSKA, ECONOMIC RESEARCH, RAIFFEISENBANK
"In an annual comparison, industry has been falling over the
whole fourth quarter of 2008."
"It is no surprise that the drop in industry was led by the
car industry when the biggest Czech producer Skoda Auto did not
produce in the middle of the months."
"We are worried that industry will continue to fall at a
double digit pace in the first half of the year."
"In the second half of the year it will hopefully return to
black numbers thanks to the stabilisation of the global economy
and renewed production of cars in the Czech Republic."
JAN VEJMELEK, FINANCIAL MARKETS ANALYST, KOMERCNI BANKA
"Industrial output has fallen for a third month in a row.
That points to the fact that GDP (data) in the fourth quarter of
2008 that will be released on Friday will be very weak."
"A dramatic drop in orders shows industrial output this year
will show a major drop (which) increases the risk that overall
GDP this year will fall."
"The reason for this bad situation is that the Czech economy
is highly depended on industry."
PAVEL SOBISEK, CHIEF ECONOMIST, UNICREDIT, PRAGUE
"The figures are depressing, but the scale of surprise is
much lower than in November."
"But I see one small light at the end of the tunnel in the
fact that industrial sales dropped less than output, which means
the previous six-month (streak) was broken and companies may no
longer be producing something that is hard to sell."
DAVID MAREK, CHIEF ECONOMIST, PATRIA FINANCE
"A negative string of Czech data has been continuing over
the last one to two months... confirming the fact the Czech
economy is already in a recession."
"The drop in orders is very significant and shows industrial
production will continues to fall in the coming months."
"Despite a Czech central bank warning, interest rates will
likely continue to fall and preparations of a fiscal stimulus
package should speed up. The economy needed it at the turn of
the year. It's already late now, but it's better than even
later."
BACKGROUND:
- November foreign trade figures..................[]
[]
- Report on last Czech c.bank rate decision.........[]
[] [] []
LINKS:
- For further details on December output and sales numbers and
past data, Reuters 3000 Xtra users can click on the Czech
Statistical Bureau's Website:
http://www.czso.cz/eng/csu.nsf/kalendar/2004-pru
- For LIVE Czech economic data releases, click on <ECONCZ>
- Instant Views on other Czech data []
- Overview of Czech macroeconomic indicators []
- Key data releases in central Europe []
- For Czech money markets data click on <CZKVIEW>
- Czech money guide <CZK/1>
- Czech benchmark state bond prices <0#CZBMK=>
- Czech forward money market rates <CZKFRA>
(Reporting by Jason Hovet; Editing by Michael Winfrey)
