PRAGUE, March 23 (Reuters) - Czech industrial output plunged
by 23.3 percent year-on-year in January, more than forecast and
almost double a revised 12.8 percent fall in December, data
showed on Monday.
Analysts had expected an 18.0 percent annual fall in
January.
****************************************************************
KEY POINTS:
(y/y change in pct) Jan Dec Jan forecast
Industrial output -23.3 -12.8 (-14.6) -18.0
Industrial sales -21.1 -11.4 (-13.7) n/a
(Full table of data............................[])
- Seasonally adjusted output was down 2.9 percent
month-on-month.
- Seasonally adjusted output was down 21.5 percent year-on-year.
- Overall new orders fell 26.6 percent year-on-year, and new
orders from abroad decreased 27.1 percent.
COMMENTARY:
PETR DUFEK, ANALYSTS, CSOB
"It is a fairly tragic number caused mainly by the car
sector, steel works and machinery producers."
"It is much worse than our most pessimistic scenario of an
18 percent drop. The result shows that there is nobody to sell
to and a recession in western Europe is crushing Czech
companies."
"GDP estimates will be revised down due to industrial data
and thoughts of raising interest rates are far too early."
JAN VEJMELEK, HEAD OF ECONOMIC AND STRATEGY AND RESEARCH,
KOMERCNI BANKA
"Industrial output disappointed; it has fallen for the
fourth month in a row at a worsening pace. This we think
confirms recession in the Czech Republic."
"A dramatic drop in orders shows that industrial output
shows a significant drop this year."
"The unfavourable situation in the industrial sector is one
of key reasons for the expected GDP drop by up to 2 percent."
VOJTECH BENDA, SENIOR ECONOMIST, ING WHOLESALE BANKING
"The fall of industrial production confirms fears that the
economy could drop 3-4 percent this year."
"From the central bank's view, it is a relatively clear
argument for further lowering of interest rates, which could be
indicated after Thursday's rate meeting."
DAVID MAREK, CHIEF ECONOMIST, PATRIA FINANCE
"The data shows the worst impact from the financial crisis
came at the beginning of this year."
"Due to a further worsening in western Europe, industrial
orders in Germany plunged in January and I think February will
bring more strongly negative results of Czech industry."
"This is in line with the worse forecasts and opens room for
considering cutting interest rates until the middle of this
year, although in the near term the crown volatility will
prevent (a cut in rates)."
JAROMIR SINDEL, CHIEF ECONOMIST, CITIBANK, PRAGUE
"It was much more than expected so I think that it has
implications for monetary policy. On Thursday (at the next rate
setting meeting) interest rates are likely to remain unchanged
due to exchange rate volatility. But I think the central bank is
going to cut in the second quarter following an ECB cut."
MARKET REACTION:
The crown <EURCZK=> was slightly weaker at 26.645 per euro
by 0826 GMT, after trading at 26.62 before the data.
BACKGROUND:
- December foreign trade figures..................[]
[]
- Report on last Czech c.bank rate decision.........[]
[] [] []
LINKS:
- For further details on January output and sales numbers 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-pru
- 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>
(Reporting by Jason Hovet)
