INSTANT VIEW 4-Czech Aug PPI +0.4 pct month-on-month

                                
 PRAGUE, Sept 12 (Reuters) - Czech industrial producer prices
rose 0.4 percent in August from July, faster than market
forecasts, putting the annual rate at a three-and-a-half-year
high of 5.7 percent, from July's 5.2 percent.
                                
 The statistical bureau said agricultural producer prices
dipped 9.8 percent in August on the month, for a 6.3 percent
year-on-year increase, decelerating from July's 21.4 percent.
****************************************************************
KEY POINTS:
(change in percent)       Aug        July       Aug forecast
 PPI
 month/month              0.4        0.1        0.0
 year/year                5.7        5.2        5.3

(For full table of data........................[ID:nPRA002122])

- The annual figure was the highest since March, 2005. 
- The monthly growth in the producer price index (PPI) was led
by a 3.1 percent rise in metal products prices, the highest
growth rate since August 2004. 
- Food prices rose 0.4 percent on the month, while prices of
coke and refinery products fell 6.1 percent.
                                
 
                                
 COMMENTS:
                                
 
                                
 MICHAL BROZKA, ANALYST, RAIFFEISENBANK
"It's right to be surprised. The drop of oil prices was
exceeded by the growth in metal prices... In the following
months we expect a drop in producer prices to below 4 percent
year-on-year. 
                                
 "The fast slowdown in growth of agricultural prices was on
the other side very positive."
                                
     
                                
 MARTIN LOBOTKA, ANALYST, CESKA SPORITELNA
                                
 "It was to be expected... Despite some decline, oil prices
kept relatively high."
                                
 "I think the central bank will wait for what happens with
inflation at the end of the year."
                                
 "It is definitely not such a strong number that it would
prompt the central bank to hike rates."
                                
 "If the economy shows some weakness, there could be an
interest rate cut in November."

                                
  DAVID MAREK, CHIEF ECONOMIST, PATRIA FINANCE
                                
 "While industrial prices grew faster than expected,
agriculture prices fell sharply, so the overall picture is
moderately positive."
                                
 "It changes the outlook for a steep decline in borrowing
costs and we now expect only a gradual decline." 
                                
 
                                
 JAN VEJMELEK, HEAD OF ECONOMIC AND STRATEGY RESEARCH,
KOMERCNI BANKA
                                
 "Agricultural prices recorded a significant drop and I think
this is more important than PPI (producer prices).
                                
 "This is good news for consumer inflation as a whole. It
shows that the peak in food prices is behind us, and the
inflation outlook is really positive, meaning it will go down
further and food prices are not inflation risks."

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).

- August consumer inflation                       [ID:nL8630452]
- July industrial output figures                 [ID:nPRA002118]
- Report on last Czech c.bank rate decision         [ID:nL74314]
                                
                               [ID:nL7705441] [ID:nPRA002063]

LINKS:
- For further details on August 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>
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 (Writing by Jana Mlcochova; Editing by Michael Winfrey)