Slovak April PPI below forecast, rates seen steady

...not 
spark a monetary policy easing in the near future. 
    Producer prices fell by 0.3 percent month-on-month in April, 
putting the annual inflation rate for factory-gate costs (PPI) 
at 2.2 percent, the Statistics Office said. 
    Analysts in a Reuters poll had forecast producer prices to 
have risen by 0.3 percent month-on-month in April, for an annual 
rate of 2.8 percent. 
    "The data was influenced mainly by a decline in 
manufacturing prices, and energy prices were also a contributing 
factor, probably because of gas prices," said Eduard Hagara, an 
analyst at ING Bank in Bratislava. 
    Prices of manufactured goods fell by 0.1 percent on the 
month, after a 0.6 percent rise in March, while energy prices 
fell by 0.4 percent month-on-month, after a 0.7 percent decrease 
in the previous month. 
    The decelerating producer price inflation mirrors slowing 
growth in consumer prices, which had allowed the central bank to 
cut official interest rates by 25 basis points in March and 
again in April. 
    But analysts expected the central bank to leave the key 
interest rate unchanged at 4.25 percent at the May monetary 
policy meeting on Tuesday despite the favourable producer price 
data. 
    "There is no major implication for the monetary policy 
settings, as the monetary policy's key goal is to bring official 
interest rates to the level of the European Central Bank," said 
Maria Valachyova, the senior analyst at Sloveska Sporitelna in 
Bratislava. 
    The main euro zone interest rate is now 3.75 percent, and 
the market widely expects a 25 basis point hike in June. 
    (For a full table of April PPI data ..... [ID:nPRG000361]) 
    

[BRATISLAVA/Reuters/Finance.cz]