INSTANT VIEW 3-Czech Jan PPI rises m/m on energy cost jump

                                
 PRAGUE, Feb 20 (Reuters) - Czech industrial producer prices
rose 1.1 percent in January from December, and showed an annual
decline of 0.8 percent from December's 0.2 percent drop.
                                
 The statistics bureau said agricultural producer prices fell
3.0 percent on the month, for a 26.8 percent year-on-year drop,
accelerating from December's 22.8 percent fall.
****************************************************************
KEY POINTS:
(change in percent)       Jan        Dec        Jan forecast
 PPI
 month/month               1.1       -1.5        0.3
 year/year                -0.8       -0.2*      -1.7
(*) revised 
 For full table of data........................[ID:nPRA002383])

- The monthly increase in the producer price index (PPI) was led
by a 10.8 percent growth in electricity, gas and heating prices.
- Food and tobacco prices dipped 0.6 percent on the month.
                                
 
                                
 COMMENTS
                                
 HELENA HORSKA, ECONOMIST, RAIFFEISENBANK
                                
 "Due to the global situation one would expect a bigger drop
in producer prices. But energy prices react to an economic
decline with a delay. That complicates the situation of
companies that face a plunge in orders and need to cut costs."
                                
 "The date supports a more cautious attitude to rate cuts by
the Czech central bank. We do not exclude that there will be one
more cut to 1.5 percent."
                                
 
                                
 TOMAS VLK, ANALYST, PATRIA FINANCE
                                
 "Overall these numbers are somewhat lower than we expected
and they probably would not support further rate cuts. The crown
is important, of course."
                                
 "We have revised our outlook after its recent weakening to
one more cut by 25 basic points, but the timing shall be
determined by the FX market moves."
                                
 
                                
 PETR DUFEK, ANALYST, CSOB
                                
 "As we expected... due to the higher electricity prices.
It's positive development year-on-year."
                                
 "Generally (this is) positive news for the future
development of inflation."
                                
 "(For) monetary policy... the CNB is focussed on the
exchange rate of the crown. So this figure will not influence
monetary policy decision."
                                
 
                                
 PAVEL SOBISEK, CHIEF ECONOMIST, UNICREDIT, PRAGUE         
                                
 "The number shows the disinflation tendencies are not as
strong as one would expect in light of the weak demand."
                                
 "The annual number was a surprise, the market expected a
(bigger) drop. The main difference (from market expectations)
was in energy prices."
                                
 
                                
 
BACKGROUND:
- Industrial PPI and agriculture producer prices are watched
closely by the markets as leading indicators for consumer
inflation, which is targeted by the Czech central bank (CNB).

- January consumer inflation                        [ID:nL91361]
                                
                               [ID:nL9192673] [ID:nPRA002361]
- December industrial output figures              [ID:nLB300021]
                                
                               [ID:nLB729502] [ID:nPRA002366]
- Report on last Czech c.bank rate decision.........[ID:nL54762]
                                
               [ID:nL5536584] [ID:nPRA002354] [ID:nPRG001229]

LINKS:
- For further details on January producer prices and past data,
Reuters 3000 Xtra users can click on the statistical bureau's
Website:
                                
 http://www.czso.cz/eng/csu.nsf/kalendar/2004-ipc

- For LIVE Czech economic data releases, click on       <ECONCZ>
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 (Writing by Jana Mlcochova; editing by Patrick Graham)