PRAGUE, March 16 (Reuters) - Czech retail sales fell by 5.0
percent year-on-year in January, a much bigger drop than
analysts' forecast, data showed on Tuesday.
Retail sales have been shrinking since October 2008, hit by
rising unemployment and weak household spending.
Analysts predict a slow and uneven recovery for the small
and export-reliant economy.
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KEY POINTS:
(change in percent) Jan Dec Jan forecast
RETAIL SALES (y/y) -5.0 -1.9 -2.7
(Click on [] for full table of Jan retail sales)
- 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 0.6 percent month-on-month, while dropping 3.6 percent
year-on-year in January.
- Unadjusted car and car maintenance sales fell by a real 6.2
percent year-on-year, with car sales dropping by 3.7 percent and
maintenance sales contracting by 17.7 percent, pulling down the
overall figure.
COMMENTARY:
HELENA HORSKA, ANALYST, RAIFFEISENBANK
"Retail stayed in negative territory and fell faster than
the market predicted."
"Not even after-Christmas sales and discounts prevented the
decline. The mood of consumers at the start of the year
worsened, so it is not a surprise the households have held back
on shopping."
"We expect an improvement in the retail situation only in
the second half of the year. At that time, the financial
situation of families should start to improve thanks to a
stabilisation of unemployment. We expect a fall in sales this
year of around 1 percent."
MIROSLAV FRAYER, ANALYST, KOMERCNI BANKA
"These figures are quite a disappointment. A lot of people
bought goods at the end of last year, and... so there was only
an increase in car sales but other goods registered a further
decline. It shows that consumer demand remains quite weak."
"This year we will remain in negative territory but the
decline will be lower than last year... with a decline of about
1 percent."
"The unemployment rate is near its top, and will stabilise
at these levels. We expect a rate slightly below 10 percent by
the end of the year. Fiscal restrictions, and tight lending
conditions, and minimal growth of wages (are other drags on
retail sales)."
PETR DUFEK, ANALYST, CSOB:
This is worse than expected, it shows that not even
discounts at the beginning of the year helped.
As the development of the median wage had shown, consumers
certainly do not have a reason to spend. Especially given they
cannot expect an improvement in the economic and financial
situation this year.
Inflation pressures have completely vanished and inflation
is only driven by regulated prices and tax changes. This is
another reason why interest rates can easily remain on a low
level almost until the end of the year.
JAROMIR SINDEL, CHIEF ECONOMIST, CITI, PRAGUE
"As expected car sales were better in the year-on-year
comparison, car registrations pointed to an improvement.
"As for the core data, there was a negative influence of
fuels but it still shows that domestic demand will remain weak
in the first half which will mean unchanged interest rates in
the first half."
MARKET REACTION
Crown at 25.465 to the euro from 25.435 ahead of the data.
BACKGROUND:
- February consumer inflation []
- January industrial output []
- Report on last Czech c.bank rate decision......[]
[] [] []
LINKS:
- For further details on January retail sales 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; editing by Jan Lopatka and Michael
Winfrey)
