INSTANT VIEW 3-Czech Aug retail sales keep momentum

    PRAGUE, Oct 18 (Reuters) - Czech retail sales grew 6.8 
percent year-on-year in August, sustaining a healthy momentum 
largely above the consensus market forecast and confirming this 
year's consumer spending revival. 
 
KEY POINTS: 
(change in percent)      Aug         July       Aug forecast 
RETAIL SALES (y/y)       6.8         6.4         5.8 
 
(Click on [ID:nPRA000980] for full table of August retail sales) 
 
- The headline, seasonally-unadjusted figure includes car sales 
and repairs, fuel sales and spending on a variety of consumer 
goods, including foodstuffs. 
- In seasonally unadjusted terms, retail sales net of cars and 
fuel grow 6.1 percent year-on-year, slowing after a revised 6.8 
percent jump a month earlier. 
- Seasonally-adjusted sales including the auto segment rose by 
real 0.2 percent month-on-month in August and 0.1 percent 
excluding the auto segment. 
- Non-food retail sales, excluding the auto segment, up 7.6 
percent year-on-year. 
- In the auto segment, sales up 8.3 percent year-on-year thanks 
to cars sales and repairs; Used car sales grew faster than sales 
of new cars. Fuel sales dropped 1 percent. 
 
    COMMENTARY: 
    ALES MICHL, ANALYST, RAFFEISENBANK, PRAGUE 
    "This is a great result for our retailers. They can look 
forward to Christmas. We are already buying more than ever, 
retail sales have been rising for 33 months in a row. 
    "This year's growth will exceed 6 percent. It will be twice 
what it was last year. 
    "Growing household demand is a reason for the Czech National 
Bank to continue with a gradual increase of interest rates. I 
expect the repo rate to grow to 3 percent at the end of next 
year from today's 2.5 percent." 
 
    JAN VEJMELEK, HEAD OF ECONOMICS AND STRATEGY RESEARCH, 
KOMERCNI BANKA, PRAGUE 
    "The August result exceeded market expectations and also our 
most optimistic forecast. The reason is mainly the growth of 
disposable household income. That is reflected mainly in the 
growing consumption of non-food goods. 
    "We expect a 25 basis point increase in interest rates in 
the fourth quarter to 2.75 percent (probably in November), and 
to 3.50 percent during the next year." 
 
    MARKET REACTION 
    Crown currency flat at 28.355 to the euro <EURCZK=>. 
     
    BACKGROUND: 
- Sept consumer inflation         [ID:nL09819912 [ID:nL09207227] 
- Aug industrial output figures                   [ID:nL1264101] 
- Report on last Czech c.bank rate decision      [ID:nL27342627] 
                                 [ID:nL27365976] [ID:nPRA000961] 
LINKS: 
- For further details on August 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       <ECONCZ> 
- 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                <CZKVIEW> 
- Czech money guide                                      <CZK/1> 
- Czech benchmark state bond prices                   <0#CZBMK=> 
- Czech forward money market rates                      <CZKFRA> 
 
 ((Writing by Marek Petrus; Editing by Alan Crosby; 
prague.newsroom@reuters.com; Reuters Messaging: 
marek.petrus.reuters.com@reuters.net; +420 224 190 477)) 
  Keywords: ECONOMY CZECH RETAIL