PRAGUE, Jan 15 (Reuters) - Czech industrial producer prices
fell 1.5 percent in December from November, and showed an annual
decline of 0.2 percent from November's 1.2 percent growth.
The statistics bureau said agricultural producer prices fell
2.5 percent in December on the month, for a 22.8 percent
year-on-year drop, accelerating from November's 19.5 percent
fall.
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KEY POINTS:
(change in percent) Dec Nov Dec forecast
PPI
month/month -1.5 -1.9 -1.4
year/year -0.2 1.2 0.1
(For full table of data........................[])
- The monthly decline in the producer price index (PPI) was led
by a 19.0 percent drop in refining and coke prices.
- Food and tobacco prices dipped 0.5 percent on the month.
COMMENTARY:
JIRI SKOP, ANALYST, KOMERCNI BANKA
"It is a little bit less than we expected but a strong
decrease again. The driver is the same: (falling) oil prices."
"For this year we expect an average (year-on-year) decline
of almost 4 percent... but declines on month-on-month rate
should be smaller."
"So the drops in prices should decelerate and there will be
some stabilisation in the next three or four months."
JAROMIR SINDEL, ANALYST, CITIBANK
"A strong disinflation already indicated in other data
continues. Commodity prices are plummeting, other producers are
also forced to reduce prices..."
"All this indicates that the Czech central bank will cut
rates in February and its likely to follow the suit of the ECB.
We expect (euro zone main rate) at 1 percent in the middle of
the year and the Czech bank is unlikely to be far from the ECB.
MICHAL BROZKA, ANALYST, RAIFFEISENBANK
"Oil dragged down prices in industry faster than we
expected. On the other hand, the growth of prices in transport
was a little surprise."
"The overall message does not change the full picture --
prices in industry will be in our outlook about 1.5 percent
lower this year than last, which is an argument for a further
drop in interest rates."
DAVID MAREK, PATRIA FINANCE, CHIEF ECONOMIST
"The reason is obvious: it is cheaper oil and its influence
on refining product prices."
"Prices of other commodities on global markets are also
falling, including metal prices."
"There is no obstacle for the Czech central bank to continue
cutting interest rates aggressively."
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).
- December consumer inflation []
- November industrial output figures []
[]
- Report on last Czech c.bank rate decision []
[] [] []
LINKS:
- For further details on December 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)
