INSTANT VIEW 1-Slovak Aug PPI touch above forecasts

    Sept 28 (Reuters) - Slovak producer prices rose 0.6 percent 
month-on-month in August, above market expectations, putting the 
annual inflation rate for factory-gate costs (PPI) at 8.8 
percent, data showed on Thursday. 
 
KEY POINTS: 
PRODUCER PRICES             Aug 06       July 06      Aug 05 
 pct change month/month      +0.6         +0.6         +0.8 
 pct change year/year        +8.8         +9.0         +5.6 
 
- Analysts polled by Reuters had forecast a producer 
price rise of 0.3 percent on a monthly basis in August, and 8.5 
percent on an annual basis <SK/ECON04>.  
- Of the three PPI categories, growth in prices of industrial 
products rise by 0.3 percent on the month, after a 0.8 percent 
rise in July. 
- Prices of electricity, gas, steam and hot water increase by 
0.9 percent, month-on-month, in August, up from a 0.3 percent 
rise matching their annual rise from the previous month. 
- Prices of raw materials fall 0.1 percent, after a 2.4 percent 
monthly rise in July. 
- Within industrial products, refinery goods up 0.3 percent 
month-on-month, after a 3.6 percent jump in June. 
 
MARKET REACTION: 
- The Slovak crown showed no immediate reaction to the data. It 
traded at 37.390 to the euro on Thursday, little changed from 
Wednesday's close. 
     
BACKGROUND: 
- Slovak producer prices have shot up this year mainly due to 
the higher cost of oil and natural gas. 
- Accelerating PPI has coincided with increasing risks for 
consumer inflation, which prompted the central bank to raise 
interest rates by 25 basis points in September, a fourth rise in 
2006. 
- The central bank reiterated a hawkish tone after the September 
monetary policy meeting and said more policy tightening was 
likely this year if upward pressures on prices persists. 
- Analysts widely expect the central bank to raise interest 
rates further in 2006 to slash inflation and make Slovakia 
eligible for adopting the euro in 2009. 
- The central bank expects to miss its end-2007 consumer 
inflation target of 2.0 percent, but a slowdown in price growth 
in 2008 will allow Slovakia to meet the euro adoption criteria. 
     
LINKS: 
- For further details on August producer prices, Reuters 3000 
Xtra users can click on the statistics office's website: 
    http://www.statistics.sk/webdata/english/index2_a.htm 
 
- For LIVE Slovak economic data releases, click on......<ECONCZ> 
- Schedule of upcoming indicator releases............<SK/ECON09> 
- Summary of short-term economic data forecasts......<SK/ECON04> 
 
- Stories on Slovak currency moves........................[SKK/] 
- Slovak speed money guide ..............................<CZK/1> 
- Slovak benchmark state bond prices .................<0#SKBMK=> 
- Slovak forward money market rates ....................<SKKFRA> 
 ((Reporting by Peter Laca; Editing by Alan Crosby; 
bratislava.newsroom@reuters.com; Reuters Messaging: 
martin.santa.reuters.com@reuters.net; +421 2 5341 8402)) 
  Keywords: ECONOMY SLOVAKIA PPI