PRAGUE, Aug 16 (Reuters) - Czech industrial producer prices
were flat in July versus the previous month and rose 2.3 percent
from a year earlier, showing the fourth annual growth since
November 2008, data showed on Monday.
The data was lower than expected, with analysts forecasting
a 0.2 percent month-on-month increase in industrial PPI and 2.5
percent growth year-on-year <CZ/ECON04> <CZ/ECON15> <ECONCZ>.
The monthly growth was driven mainly by a 1.4 percent rise
in metals prices, and a 0.7 percent gain in prices of food
products, the data showed. In June, producer prices rose 2.0
percent year-on-year.
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KEY POINTS:
(change in percent) July June July forecast
PPI
month/month 0.0 0.5 0.2
year/year 2.3 2.0 2.5
(For full table of data........................[])
COMMENTARY:
MICHAL BROZKA, ANALYST, RAIFFEISENBANK
"The result is below our estimate due to the lower growth in
metals prices and significant declines in the prices of
chemicals and vehicles."
"We continue to expect that commodity prices will push PPI
up and producer prices will rise around 4.0 percent in the
beginning of the next year."
DAVID MAREK, CHIEF ECONOMIST, PATRIA FINANCE
"The development reflects the global development, where on
the one hand, there are some positive data, and on the other
there are warnings that the recovery may not be as strong as
expected."
"The threat of deflation in producer prices has definitely
not passed, but at the same time there has been no steep
acceleration, and that should not happen in the coming months."
"From the perspective of monetary policy, the data indicates
the central bank can keep interest rates unchanged at the
present low level for a very long time, and rates will likely
not change sooner than in the middle of next year."
PAVEL SOBISEK, CHIEF ECONOMIST, UNICREDIT, PRAGUE
"It is not too surprising. There is a pause in the
month-on-month growth after three months of relatively strong
expansion in PPI. Year-on-year PPI keeps growing due to the last
year's (low) comparison base."
"I do not see any significant turnaround in the trend even
though the reading was below analysts' estimates."
"In the month-on-month comparison I expect further
stagnation, in year-on-year terms there should be further
growth."
DETAILS
- Agricultural producer prices rose by 0.5 percent on the
month and showed a 0.6 percent year-on-year decline.
- Prices of chemicals dropped by 3.1 percent and prices of
vehicles fell by 1.0 percent, the statistics office said.
- Construction work prices were also flat month on month and
dropped 0.2 percent year-on-year.
- Prices in the service sector dipped 0.8 percent on the month
and fell 1.2 percent year-on-year due to a drop in advertising
prices.
BACKGROUND:
- Industrial PPI and agriculture producer prices are watched
closely by the markets as leading indicators for consumer
inflation, which is targeted by the Czech central bank (CNB).
- July consumer inflation []
- June industrial output figures []
- Report on last Czech c.bank rate decision......[]
[] [] [] []
LINKS:
- For further details on July producer prices and past data,
Reuters 3000 Xtra users can click on the statistical bureau's
Website:
http://www.czso.cz/eng/csu.nsf/kalendar/2004-ipc
- 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>
(Writing by Jana Mlcochova)
