PRAGUE, June 15 (Reuters) - Czech industrial producer prices
rose by a faster-than-expected 0.7 percent in May from April and
1.5 percent from a year ago, showing the second annual growth
since November 2008, data showed on Tuesday.
Analysts had forecast a 0.2 percent month-on-month increase
in industrial PPI and a growth of 1.0 percent year-on-year
<CZ/ECON04> <CZ/ECON15> <ECONCZ>.
The month-on-month growth was driven mainly by a 2.9 percent
rise in metals prices, and a 1.7 percent gain in prices of coke
and refining products.
Food prices fell moderately, the statistics office said.
In April, producer prices rose 0.4 percent year-on-year.
The statistics bureau said agricultural producer prices rose
by 0.7 percent on the month, and showed a 1.2 percent
year-on-year drop.
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KEY POINTS:
(change in percent) May April May forecast
PPI
month/month 0.7 0.7 0.2
year/year 1.5 0.4 1.0
(For full table of data........................[])
- Construction work prices dipped by 0.1 percent on the month
and dropped 0.2 percent year-on-year.
- Prices in the service sector grew 0.1 percent on the month and
fell 1.8 percent year-on-year due to a drop in advertising
prices.
COMMENTARY:
RAFFAELLA TENCONI, CHIEF ECONOMIST, WOOD&CO
"It is quite surprising, it is significantly higher than
expectated. But the main driver are steal prices which in many
respects is not surprising."
"As for the implication for the consumer prices inflation
the near term outlook for consumer prices remain benign."
"On the whole I would say there are some upside risks to
inflation in the near term, but the bulk of risk in my view will
be in 2011 when the economy will pick up some steam."
"In the near term the focus of the central bank will be to
support the recovery, so the rates are likely to remain and may
even be cut if the currency were to appreciate significantly
from the current level."
"(Concerning the Czech crown) I see very modest effects from
this release."
TOMAS VLK, ANALYST, PATRIA
"We can see there an impact of commodity prices that may
also influence consumer prices with some delay."
"The central bank will likely be deciding between no change
and a 25 bp cut in interest rates (at a meeting next week).
Today's PPI figures are an argument for the first option, but it
will likely be a tight vote."
PAVEL MERTLIK, CHIEF ECONOMIST, RAIFFEISENBANK
"Producer prices rose significantly for the second
consecutive month... their development is similar to that in
Germany and the euro zone. Industrial and export recovery can
now be seen also in the movement of the industrial prices."
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).
- May consumer inflation []
[]
- April industrial output figures []
- Report on last Czech c.bank rate decision......[]
[] [] [] []
LINKS:
- For further details on May 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)
