PRAGUE, April 4 (Reuters) - Czech retail sales rose 6.5
percent year-on-year in February, far above market expectations
for 3.9 percent growth, data showed on Monday.
The statistics office said the data was mostly influenced by
car sales and sales of non-food products.
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KEY POINTS:
(change in percent) Feb Jan Feb forecast
RETAIL SALES (y/y) 6.5 6.9 (6.8) 3.9
Details of Jan retail sales data []
MARKET REACTION:
The Czech crown <EURCZK=> was a touch firmer, trading at
24.450 the euro after the data from 24.455.
COMMENTARY:
RADOMIR JAC, CHIEF ANALYST, GENERALI PPF ASSET MANAGEMENT
"Czech retail sales are a positive surprise as they show a
strong annual increase for the second month in the row."
"Although the headline growth was supported mainly by sales
and repairs of motor vehicles, very healthy growth is also seen
in sales of non-food goods."
"Although retail sales data is certainly not the most
important factor for monetary policy decisions, developments
seen on this side in January and February are supportive to
expectations that the Czech central bank may seriously debate an
interest rate hike (by 25 basis points) in the second quarter."
"Commodity prices are pointing to upside risk regarding the
inflation outlook and the European Central Bank will launch a
tightening cycle with all likelihood already this week."
JAROMIR SINDEL, CHIEF ECONOMIST, CITIBANK, PRAGUE
"Retail sales were supported by the automobile segment but
we think that in the coming months we will see a decline in this
segment because of the base effect from last year. So retail
sales should return to weaker numbers."
"We do not expect that the positive numbers should last in
coming months and quarters."
"As for the central bank, the story remains unchanged,
domestic demand will stay relatively weak and as for monetary
policy, we expect some normalisation, which means a moderate
rise in interest rates, by 50 basis points this year."
"Our forecast expects the beginning of rising interest rates
in May."
PAVEL SOBISEK, CHIEF ECONOMIST, UNICREDIT, PRAGUE
"Retail sales are not as strong as the headline figure
looks. They are strong because of ongoing high sales of cars and
repairs which can be the result of business activities rather
than retail activity."
"If I look at the narrower retail indicator without cars,
the growth was just 2.4 percent year-on-year and was below
January. Nevertheless, even that means year-on-year growth,
which is a change. That should be taken into account for
monetary policy."
"The next inflation report in May could become more upbeat
on inflation. Not primarily because of demand-driven inflation,
but definitely slow retail sales will not curb inflation as much
as would be the case if they were weaker."
DAVID MAREK, CHIEF ANALYST, PATRIA FINANCE
"The forecast-beating result is mainly thanks to car sales."
"The number is positive and is above expectations for a
second month in a row. But if we look at the core retail sales,
excluding cars, the growth is relatively moderate and
corresponds to the fact that unemployment has been decreasing
only very slowly and wages stagnate."
"It shows that demand remains tamed and does not generate
any dangerous inflationary pressures, there is no reason to rush
with policy tightening."
DETAILS
- The headline, unadjusted figure includes fuel sales.
- Seasonally-adjusted sales of cars and repairs rose by a real
1.8 percent month-on-month. Year on year, they rose by 16
percent in February, both working day-adjusted and unadjusted.
- Seasonally adjusted sales including fuel increased by a real
0.4 percent month on month and by an annual 2.4 percent, both
working day adjusted and unadjusted.
BACKGROUND:
- February consumer inflation [] []
- January industrial output []
- Report on last Czech c.bank rate decision......[]
[] [] []
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 <ECONCZ>
- Instant Views on other Czech data []
- Overview of Czech macroeconomic indicators []
- Key data releases in central Europe []
- 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 Jana Mlcochova; Editing by John Stonestreet and
Jason Hovet)
