PRAGUE, May 29 (Reuters) - Czech industrial output dropped
by 23.2 percent year-on-year in April, the Czech Statistical
Bureau (CSU) said in a flash estimate on Friday, much worse than
analysts expectations for a 19.0 percent fall.
The drop followed a slight recovery in March, when industry
contracted by 17.0 percent year-on-year, but returned almost to
the rate of contraction seen in February, when production fell
by 23.4 percent, the most since at least 2001.
Analysts said the fall could potentially prompt further
loosening in monetary policy by the Czech central bank, which
cut its main two-week repo rate to an all-time low 1.5 percent
this month.
The CSU, which started providing a flash estimate on
production in April, said the figure was based on data captured
before May 25 that included 68 percent of respondents
representing 79 percent of the survey sample in total revenues.
The statistics office will release full details on June 11.
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KEY POINTS:
(y/y change in pct) April March April forecast
Industrial output -23.2 -17.0 -19.0
- Seasonally adjusted output was estimated to be down 20.5
percent year-on-year.
- Industrial sales fell 23.9 percent annually in current prices
in April.
- The value of new orders dropped 27.5 percent year-on-year in
April, of which foreign orders fell 27.9 percent.
COMMENTS:
MARTIN LOBOTKA, ANALYST, CESKA SPORITELNA
"It's back to the situation in February... (The scrap
subsidy) effect is probably fading away."
"There is no structural or underlying improvement in
industrial production... The bottom is not going to get any
worse, but the bottom might just be long and flat, meaning we
will see drops of this magnitude at least for another few
months, and maybe a tiny improvement in the fourth quarter."
"This will show (the central bank) the economy is still
weak."
DAVID MAREK, CHIEF ECONOMIST, PATRIA FINANCE
"It is another signal showing that the crisis is continuing
in the second quarter. The data are negative across the whole
industrial sector... which demonstrates that the influence of
measures such as the scrap subsidy and others in western Europe
did not help Czech industry too much."
"We must wait for the statistics to improve in Germany and
only then is there hope for an improvement in the Czech
Republic."
JAN VEJMELEK, HEAD OF ECONOMIC AND STRATEGY RESEARCH,
KOMERCNI BANKA
"It was a disappointment definitely, well below our
expectations. It shows the recession in the industrial sector is
deeper than expected."
"It means it is broad-based, because I would expect some
improvement in the automotive sector due to the scrap subsidy
abroad. But it seems the rest of the (industrial) sector is in
deeper recession than we had expected."
"It might be an argument for speculation of another interest
rate cut."
LINKS:
- For further information on April special preliminary releases
on industry data, Reuters 3000 Xtra users can click on the Czech
Statistical Bureau's Website:
http://www.czso.cz/eng/redakce.nsf/i/home
- 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)
