PRAGUE, March 15 (Reuters) - Czech industrial producer
prices rose 0.5 percent month-on-month in February and 5.4
percent year-on-year, slightly above market expectations and the
biggest annual rise since September 2008, data showed on
Tuesday.
Analysts said the rise was unlikely to affect consumer
inflation for now and should have not affect domestic monetary
policy.
They had forecast a 0.4 percent month-on-month increase in
industrial PPI and 5.2 percent year-on-year growth <CZ/ECON04>
<CZ/ECON15> <ECONCZ>.
In January, producer prices rose 1.4 percent month-on-month
and 4.6 percent year-on-year.
The monthly development was affected by a 3.9 percent growth
in chemicals, and metals rose 0.9 percent.
The statistics bureau said agricultural producer prices rose
by 5.1 percent on the month, and showed its seventh annual
growth in a row with 29.7 percent.
****************************************************************
KEY POINTS
(change in percent) Feb Jan Feb forecast
PPI
month/month 0.5 1.4 0.4
year/year 5.4 4.6 5.2
(For full table of data........................[])
COMMENTARY
PAVEL SOBISEK, CHIEF ECONOMIST, UNICREDIT, PRAGUE
"Price pressures in the manufacturing sphere are growing and
that means that sooner or later we will see this in consumer
prices. The reaction time for food prices should be short."
"It is one of the pieces of the puzzle which should be taken
into account. Against this, inflation is currently below central
bank expectations. I would expect these numbers to translate
into the next forecasts due to be released in May and the
changes should be noticeable."
"We expect that CPI will gradually rise and move over 2
percent by May, and in the rest of the year it should rather be
somewhere around 2.5 percent than 2 percent."
DAVID MAREK, CHIEF ANALYST, PATRIA FINANCE
"The reasons for the rise are food and commodity prices."
"Domestic monetary policy cannot affect that, therefore I
don't think this should be a reason for the central bank to
reassess its stance."
"But it is clear that inflation pressures from this are
rising but the question is what the present crisis in Japan will
do with commodity prices worldwide."
"Since domestic demand remains relatively weak there is only
a limited room for overspill into consumer inflation so the
pass-through is not so strong and it tames concerns that PPI
will affect CPI."
DETAILS
- In the year-on-year comparison, producer prices were
driven by a 25.1 percent rise in prices of coke and refinery
products, the statistics office said.
- Prices of metals rose 12.4 percent on the year and food prices
increased 5.0 percent.
- Construction work prices rose by 0.1 percent month-on-month
and dipped 0.3 percent year-on-year.
- Prices in the service sector rose 0.3 percent both on a
monthly and yearly basis.
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).
- February consumer inflation []
[]
- January industrial output figures []
- Report on last Czech c.bank rate decision......[]
[] [] [] []
[]
LINKS:
- For further details on February 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 Jason Hovet)
