PRAGUE, July 15 (Reuters) - Czech industrial producer prices
rose by a faster-than-expected 0.5 percent in June from May and
2.0 percent from a year ago, showing the third annual growth
since November 2008, data showed on Thursday.
Analysts had forecast a 0.3 percent month-on-month increase
in industrial PPI and a growth of 1.8 percent year-on-year
<CZ/ECON04> <CZ/ECON15> <ECONCZ>.
The month-on-month growth was driven mainly by a 2.8 percent
rise in metals prices, and a 1.6 percent gain in prices of coke
and refining products.
Food prices rose by 0.4 percent, the statistics office said.
In May, producer prices rose 1.5 percent year-on-year.
The statistics bureau said agricultural producer prices rose
by 3.0 percent on the month, and showed a 2.7 percent
year-on-year drop.
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KEY POINTS:
(change in percent) June May June forecast
PPI
month/month 0.5 0.7 0.3
year/year 2.0 1.5 1.8
(For full table of data........................[])
COMMENTARY
JIRI SKOP, ECONOMIC AND STRATEGY RESEARCH, KOMERCNI
"The growth is driven by commodity prices, mainly due to
metal and refining products..."
"From the central bank point of view, these are not the most
important data. We assume that the key interest rate will stay
at its bottom of 0.75 percent for roughly two next quarter."
RADOMIR JAC, CHIEF ANALYST, GENERALI PPF ASSET MANAGEMENT
"Producer prices in Czech industry report stronger than
expected growth for June. However, the major driver of
acceleration in annual PPI were base metals."
"Producer prices in sectors of transport equipment or
machinery and equipment are still falling on annual basis but
deflation in these sectors has been moderating."
"Worth noting is that average annual increase in PPI reached
1.3 percent in the second quarter, which compares with the Czech
central bank forecast for a 0.1 percent increase."
"Although it is unlikely that PPI statistics should shift
the central bank's view on inflationary risk -- top board
members indicate that policy rates may remain on hold longer
"than assumed" -- it is apparent that not only headline CPI
inflation but also industrial producer prices are acting as
pro-inflationary risks to the bank's forecast."
"We share the view that headline CPI inflation will climb
above 2.0 percent target during second half of the year and we
expect it to remain above 2.0 percent also in 2011, while the
central bank expects CPI inflation to fall below 2.0 percent
already in the first quarter of 2011."
"In other words, we see risk to the central bank's inflation
forecast skewed towards scenario of higher inflation."
DAVID MAREK, CHIEF ECONOMIST, PATRIA FINANCE
"Although the reading is above forecast, it poses no threat
for the central bank because inflation pressures do not come
from the domestic economy and are the result of the commodity
prices development, (and) the crown exchange rate."
"Nether PPI nor CPI give a reason the change interest rates
in the nearest future."
DETAILS
- Prices of chemicals and chemical products decreased by 1.3
percent on the month.
- Construction work prices dipped by 0.1 percent on the month
and dropped 0.3 percent year-on-year.
- Prices in the service sector dipped 0.5 percent on the month
and fell 1.5 percent year-on-year due to a drop in advertising
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).
- June consumer inflation []
[]
- May industrial output figures []
- Report on last Czech c.bank rate decision......[]
[] [] []
LINKS:
- For further details on June 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>
- 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)
