PRAGUE, July 7 (Reuters) - Czech retail sales rose by 3.1 percent year-on-year in May, above the 1.0 percent rise forecast by analysts in a Reuters poll, Czech Statistic Bureau data showed on Wednesday.
It was the second rise since October 2008, following 3.8 percent growth in March.
Analysts said the main driver was car sales but some were cautious to express too much optimism due to worries over slowing demand in western Europe, the main Czech export market. They also said planned fiscal tightening by a new centre-right government would likely hit domestic demand later this year.
Data also showed the Czech foreign trade posted a 12.3 billion crown ($653.2 million) surplus in May, marginally lower than analyst forecasts in a Reuters poll.
Exports rose 24.4 percent year-on-year, and imports rose by 25.9 percent, the fastest pace for both this year.
The Czech crown <EURCZK=> was little moved by the data, trading at 25.486 per euro. ************************************************************** KEY POINTS: (change in percent) May April May fcast RETAIL SALES (y/y) +3.1 -4.5 +1.0 FOREIGN TRADE (in bln CZK) May April May fcast balance 12.34 15.17 (15.39) 14.0 (nominal y/y change in pct) exports 24.4 13.5 (13.0) 18.0 imports 25.9 13.5 (12.9) 17.9 Details of May retail sales data................[] Details of May foreign trade data...............[]
RETAIL SALES - The headline, unadjusted figure includes retail sales plus car sales and repairs, as well as fuel sales. - Seasonally-adjusted retail sales including fuels and cars rose by a real 0.4 percent month-on-month, and dropped 0.8 percent year-on-year in May. - Unadjusted car and car maintenance sales rose by a real 13.3 percent year-on-year, with car sales rising by 16.2 percent and maintenance sales contracting by 0.4 percent. FOREIGN TRADE - According to seasonally-adjusted preliminary data, exports rose 1.9 percent in May from April, while imports were up 1.9 percent month-on-month. - In euro terms, exports rose 29.6 percent and imports rose 31.2 percent year-on-year in May. - The balance showed an annual improvement by 0.6 billion crowns from May 2009. - The improvement was mainly due a widening surplus in trade with machinery and cars.
COMMENTS
MIROSLAV FRAYER, ECONOMIC & STRATEGY RESEARCH, KOMERCNI
"Indications of improving tendencies in the labour market are a favourable factor for retail sales."
"But a large number of people are still facing a lack of work and the unemployment rate is staying at high levels."
"This year, retailers should not do as badly as last year, but we are unlikely to see growth."
"A needed fiscal restriction is likely to have a negative impact on household consumption."
RADOMIR JAC, CHIEF ANALYST, GENERALI PPF ASSET MANAGEMENT
"Data from Czech economy are very positive. Particularly, growth of exports exceeded expectations and, together with PMI surveys, it indicates that industry has been benefitting from still solid demand in its major export destinations and from effects of the relatively weak crown."
"Export statistics suggest we will see strong industrial output data for May this Friday. The cautious camp may always warn that Czech industry is sensitive on external conditions: while this is certainly true, the fact is that Czech data have been surprising on the upside and the PMI survey (or the similar survey run by the Czech Statistical Office) does not indicate that real economy data should worsen any time soon."
"Moreover, retail sales data for May also came in stronger than expected. However, it seems that car sales were the only key driver of the positive surprise: households seem to be still cautious in their consumption behaviour, at least according to retail sales data."
"That said, it is worth reminding that the first quarter GDP data showed much better performance of household consumption than what was indicated by retail sales statistics."
"Still, the export-oriented part of Czech economy has been reporting much stronger data than the segment which is oriented on domestic demand, as the still tight situation in the labour market is acting against a more substantial recovery."
PAVEL MERTIK, CHIEF ECONOMIST, RAIFFEISENBANK
"The driver (in retail sales) was car sales. Czechs began to take advantage of the peaking discounts. We think that the the May growth should be viewed (with caution). One swallow does not spring make."
"An improvement in the labour market and the resulting growth in consumer optimism will not fully show until the end of the year."
BACKGROUND: - Market expectations before release [] - Slovak April trade figures [] - May consumer inflation []
[] [] - April industrial output [] - Report on last Czech c.bank rate decision......[]
[] [] - For further details on May retail sales and foreign trade data and other past data, Reuters 3000 Xtra users can click on the Czech Statistical Bureau's website:
http://www.czso.cz/eng/csu.nsf/kalendar/2004-vzo - For LIVE Czech economic data releases, click on <ECONCZ> - Instant Views on other Czech data click on [] - 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 Jana Mlcochova; editing by Michael Winfrey)
