INSTANT VIEW 3-Czech Feb retail sales rise fastest in 3.5 yrs

...pointing to an accelerating rebound in 
household spending, data released on Tuesday showed. 
 
KEY POINTS: 
(change in percent)      Feb         Jan         Feb forecast 
RETAIL SALES (y/y)       9.4      7.6 (7.7)         6.5 
 
(Click on [ID:nPRA001252] for full table of February retail 
sales) 
 
- The headline, unadjusted figure includes car sales and 
repairs, fuel sales and spending on a variety of consumer goods, 
including foodstuffs. 
- Year-on-year growth fastest since September 2003, according to 
Reuters data. 
- Seasonally-adjusted sales including the auto segment rise by a 
real 0.6 percent month-on-month in February and jump 1.5 percent 
excluding the auto segment. 
- Retail vending net of car and fuel sales up 9.5 percent in 
seasonally unadjusted terms, posting the fastest growth on 
record. 
 
COMMENTARY: 
    VOJTECH BENDA, ECONOMIST, ING WHOLESALE BANKING, PRAGUE 
    "Retail sales beat another record after the highest 
(monthly) foreign trade surplus and construction output growth. 
The acceleration in retail sales confirms strengthening 
household consumption growth. 
    "Inflation has so far remained moderate but it can be 
expected that inflation pressure from rising industrial and 
agriculture producer prices will gradually push consumer prices 
higher. However, the moderate development of the exchange rate 
will work against a sharp inflation increase." 
     
    JAN VEJMELEK, HEAD OF ECONOMICS AND STRATEGY RESEARCH, 
KOMERCNI BANKA, PRAGUE 
    "The February rise in retail sales beat our optimistic 
estimate and clearly points to an increase in consumer demand. 
We expect high (growth) dynamics to be maintained in the coming 
months. 
    "Real wage growth, higher employment and higher social 
transfers are helping drive retail sales higher. 
    "The central bank will have to closely watch the incoming 
date on underlying inflation. Strong consumption has not yet 
been reflected there, mainly because of the firm crown." 
 
MARKET REACTION: 
- Crown steady on the day at 27.930 per euro . 
Government debt yields mixed and little changed, interest rate 
swap rates  up 1 basis point. 
 
BACKGROUND: 
- March consumer inflation                       [ID:nL10126435] 
- Feb industrial output figures                  [ID:nL11620237] 
- Report on last Czech c.bank rate decision      [ID:nPRA001221] 
                 [ID:nL06735130] [ID:nPRA001222] [ID:nL29598110] 
 
LINKS: 
- For further details on February 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        
- Instant Views on other Czech data                 [CZ/INSTANT] 
- Overview of Czech macroeconomic indicators            [CZ/ECI] 
 
- Key data releases in central Europe    [CEE-CONVERGENCE-WATCH] 
- For Czech money markets data click on                 
- Czech money guide                                       
- Czech benchmark state bond prices                    
- Czech forward money market rates                       
 
  
  Keywords: CZECH RETAIL/