(Corrects retail sales number in table to -1.9)
PRAGUE, Feb 15 (Reuters) - Czech retail sales fell by 1.9
percent year-on-year in December, above analysts' forecast, data
showed on Monday.
Poor fourth-quarter preliminary GDP data on Friday which
economists blamed on weak consumption indicated retail sales
could be disappointing in December. []
Analysts polled by Reuters had forecast a 3.0 percent
year-on-year drop in overall retail sales.
It was the fifteenth monthly fall in a row.
For the full-year 2009 retail sales fell by 4.3 percent, the
first annual drop since records started in 2001.
Data also showed Czech industrial producer prices rose 0.5
percent in January from December, showing an annual decline of
1.5 percent.
Analysts had forecast a 0.4 percent month-on-month increase
in industrial PPI and a 1.5 percent year-on-year fall.
<CZ/ECON04> <CZ/ECON15>.
In December, producer prices dropped 0.8 percent
year-on-year.
The statistics bureau said agricultural producer prices
increased 4.2 percent on the month, and showed a 6.3 percent
year-on-year drop, slowing from a 12.7 percent fall in December.
****************************************************************
KEY POINTS:
(change in percent) Dec Nov Dec forecast
RETAIL SALES (y/y) -1.9 -4.9 -3.0
(change in percent) Jan Dec Jan forecast
PPI (y/y)
month/month 0.5 0.1 0.4
year/year -1.5 -0.8 -1.5
(Full table of Dec retail sales................[])
(Full table of Jan producer prices.............[])
- The headline, unadjusted figure includes retail sales plus car
sales and repairs, as well as fuel sales.
- Seasonally-adjusted retail sales including fuels and cars rose
by a real 0.9 percent month-on-month, while dropping 3.9 percent
year-on-year in December.
- Unadjusted car sales and maintenance fell by a real 11.0
percent year-on-year, pulling down the overall figures.
- Unadjusted retail sales excluding cars sales and repair rose
by 1.1 percent year-on-year.
- The annual drop in producer prices was mainly due to metal
products which fell by 13.1 percent and food products which
dropped by 3.4 percent.
- Prices of coke and refining product rose 37.9 percent from a
year ago.
- Prices of chemicals and chemical products rose 17.1 percent
year-on-year.
- Construction work prices rose 0.2 percent on the month and
grew 0.3 percent year-on-year.
- Prices in the service sector dipped 2.1 percent on the month
and dropped 0.7 percent year-on-year due to a fall in
advertising prices.
COMMENTARY:
MIROSLAV FRAYER, ANALYST, KOMERCNI BANKA
"Although today's numbers look positive at first, they are
largely influenced by pre-Christmas shopping. November sales,
the other hand showed a deeper-than-expected decline. From this
perspective, the December data are the more favorable."
"Most of this year will follow the same trend as last year,
although declines in sales will no longer be so aggressive.
"A further increase in the rate of unemployment, especially
in the first quarter, minimal growth in wages, a lower
willingness of banks to provide loans, and fiscal restrictions
would limit consumer purchases. Retail sales should experience a
decline this year by about 1 percent."
"Consumer demand remains weak and will keep inflationary
pressures under control. The rate of inflation this year should
increase gradually towards the inflation target of 2 percent."
"We believe that the CNB's key rate is at its bottom and
will remain at 1 percent for the first half of this year. The
first rate hike expected in Q3, at the end of this year we
expect the CNB's key rate at 1.5 percent."
MICHAL BROZKA, ANALYST, RAIFFESINBANK
"A further moderate rise and the comparative base effect
from the last year will cause that PPI will probably turn to
inflation in the middle of the year and at the end of the year
will approach 3 percent."
"Inflation pressures in the economy are tiny for the moment
and today's data should not change market expectations that a
rise in Czech central bank rates should come in the second half
of the year."
PIOTR MATYS, ANALYST, 4CAST
"The sales of motor vehicles, at -11.0 percent year-on-year,
unchanged from the previous month, remained the weakest link.
While the pace of contraction eased in Dec., outlook for 2010 is
not particularly encouraging as Czech consumers could be under
pressure amid rising unemployment."
"Thus we do not expect robust domestic demand this year,
which should be reflected in the upcoming retail sales reports.
There is no need for the CNB to be concerned about pressure from
domestic demand."
MARKET REACTION:
Crown currency flat at 25.94 to the euro <EURCZK=>.
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).
- January consumer inflation []
- December industrial output []
- Report on last Czech c.bank rate decision......[]
[] [] []
LINKS:
- For further details on December retail sales, January producer
prices 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-slu
- 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)
