INSTANT VIEW 4-Czech Feb output up, March CPI +0.3 pct

                                
 PRAGUE, April 9 (Reuters) - Czech industry expanded by 7.0
percent versus a year earlier in February, in line with
expectations, while prices rose by 0.3 percent on the month in
March.
                                
 Czech industrial output rose for the third straight month.
Analysts had expected a 7.0 percent rise after revised growth of
4.9 percent in the previous month.
                                
 The annual output growth was mainly thanks to higher
production of machinery, cars and metals.
                                
 Seasonally-adjusted data showed a month-on-month drop of 0.3
percent. 
                                
 Officials and analysts expect rising global trade to help
the Czech economy to a modest recovery this year after a 4.1
percent contraction in 2009. 
                                
 The Czech central bank cut interest rates to a record low of
1 percent last year to boost the economy.
                                
 Analysts expect the bank to start tightening policy towards
the end of the year.
                                
 
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KEY POINTS:
INDUSTRIAL OUTPUT
 (y/y change in pct)       Feb          Jan        Feb forecast
 Industrial output         7.0       4.9 (5.3)       7.0
 Industrial sales          1.4       0.7 (0.3)       n/a

CONSUMER INFLATION
(pct change)               March        Feb        March fcast
 month/month               0.3          0.0           0.2
 year/year                 0.7          0.6           0.6

CZECH UNEMPLOYMENT         March        Feb        March fcast
 pct of workforce          9.7          9.9           9.9

 Details of February industrial output...........[ID:nPRA005022]
 Details of March inflation .....................[ID:nPRA005023]
 Details of March unemployment...................[ID:nPRA005024]

CENTRAL BANK FORECAST: 
                                
 The central bank saw in its last quarterly forecast February
annual inflation at 0.8 percent, while analysts in a Reuters
poll saw it at 0.6 percent.
                                
 The bank cut interest rates to a record low of 1.00 percent
on December 16, and has held rates at this level in its last
policy meetings.

DETAILS ON INDUSTRIAL OUTPUT:
- Overall new orders rose 7.8 percent year-on-year, and new
orders from abroad increased by 9.9 percent.
- Orders in the vehicle making sector rose by 16.0 percent.
- Construction output, measured by a separate index, dipped 23.6
percent year-on-year in February.

DETAILS ON CPI:
- The monthly consumer prices rose by 0.3 percent month-on-month
mainly due to a rise in food prices, mainly vegetables and
potatoes, and non-alcoholic beverages.

DETAILS ON UNEMPLOYMENT:
- Jobless rate dipped to 9.7 percent of the workforce in March,
from 9.9 percent a month earlier. Analysts in a Reuters poll saw
unemployment at 9.9 percent.
                                
 
COMMENTARY:
                                
 PETR DUFEK, ANALYST, CSOB
                                
 "Inflation was slightly above forecasts, which is no
tragedy. Food and fuels are the main reason for higher prices,
however the year-on-year inflation remains very low in
comparison with the inflation target as well as the central
bank's target.
                                
 "Demand-side inflation pressures are completely absent. The
central bank can quietly wait."
                                
 
                                
 DAVID MAREK, CHIEF ECONOMIST, PATRIA FINANCE
                                
 "Two tenths of a percentage point in unemployment drop is a
significant move for the better. It also supports the optimism
regarding industrial output. This is thanks to the development
in Germany where industrial orders are showing that the
expansion can be of a longer-term nature than expected."
                                
 "Inflation remains unharmful, the economy is recovering but
the slump was so deep that there is still large unused capacity,
so no inflation pressures arise despite an acceleration in
growth." 
                                
 
                                
 PAVEL MERTLIK, CHIEF ECONOMIST, RAIFFEISENBANK
                                
 "The unemployment rate fell surprisingly in March... The
good news is that the drop in unemployment was due to a higher
number of those who found new work."
                                
 
BACKGROUND:
- Market expectations before release             [ID:nLDE6300PT]
- February foreign trade figures.................[ID:nLDE63505G]
- February producer prices figures...............[ID:nLDE62E0AC]
- Report on last Czech c.bank rate decision......[ID:nLDE62N1MD]
 [ID:nPRG004010] [ID:nHJJ000028] [ID:nPRG003995] [ID:nLDE6201K8]

LINKS:
- For further details on February industrial output, March
inflation 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>
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 (Writing by Jana Mlcochova)