PRAGUE, Jan 11 (Reuters) - Czech consumer prices rose by 0.2
percent in December from the previous month, driven by rising
prices of food and non-alcoholic drinks, exactly in line with
market expectations.
Data showed on Monday consumer prices rose 1.0 percent in
December from a year earlier, the highest level since June.
Data also showed the jobless rate rose to 9.2 percent of the
workforce in December from 8.6 percent a month earlier, the
highest level since January 2006. Analysts in a Reuters poll saw
unemployment at 9.3 percent.
In its November quarterly forecast, the central bank
forecast December annual inflation at 0.5 percent. The bank cut
interest rates to a record low of 1.0 percent on December 16.
The Czech economy retreated by 4.1 percent year-on-year in
the third quarter but rose 0.8 percent from the previous three
months, the second quarterly growth after a two consecutive of
quarters of recession at the turn of 2008 and 2009.
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KEY POINTS:
CONSUMER INFLATION
(pct change) Dec Nov Dec forecast
month/month 0.2 0.2 0.2
year/year 1.0 0.5 1.0
CZECH UNEMPLOYMENT Dec Nov Dec forecast
pct of workforce 9.2 8.6 9.3
Details of December inflation data..............[]
Details of December jobless data................[]
- The monthly price growth was mainly due to a increase in the
prices of food and beverages, by 1.6 percent.
- Transport prices dropped by 0.7 percent, driven by a 1.7
percent fall in car prices and a 0.6 percent drop in fuel costs.
- Overall goods prices rose 0.2 percent, while prices of
services were flat.
- In the year-on-year comparison, fuel prices rose by 15.7
percent. Food prices dropped 3.5 percent.
- The averaGe inflation rate for 2009 was 1.0 percent.
COMMENTARY:
DAVID MAREK, CHIEF ECONOMIST, PATRIA FINANCE
"Inflation was in line with forecast and the reasons did not
surprise either: it is mainly higher food prices, which were on
the other hand partially offset by cheaper fuel."
"Inflation is above central bank's forecast but probably in
the upcoming half a year the bank will not do anything."
"Inflation develops in line with expectations, the economy
overcame a short-term deflation and in the latter part of the
year prices should near the inflation target of the central bank
which is a reason for rates to remain unchanged at least the
first half of the year."
MARKET REACTION:
The crown currency trades a touch lower at 26.265 to the
euro <EURCZK==> from 26.245 ahead of the data.
BACKGROUND:
- November foreign trade figures.................[]
- Report on last Czech c.bank rate decision.......[]
[] [] [] []
- The central bank (CNB) targets headline inflation last year,
which it seeks to keep at 3 percent year-on-year, allowing for
fluctuations by plus/minus one percentage point from this level.
The target will fall to 2 percent this year.
- The CNB's quarterly prediction sees consumer price inflation
of 2.4 percent in fourth quarter of 2010 and 2.2 percent in the
first quarter of 2011.
LINKS:
- For further details on December other past inflation data,
Reuters 3000 Xtra users can click on the Czech Statistical
Bureau's website:
http://www.czso.cz/eng/csu.nsf/kalendar/2004-ISC
- 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>
(Reporting by Jan Lopatka)
