INSTANT VIEW 3-Czech July industrial PPI shows record drop

                                
 PRAGUE, Aug 17 (Reuters) - Czech industrial producer prices
dipped by 0.4 percent in July from June, and showed an annual
decline of 4.9 percent, the biggest drop since 1991 when records
started.
                                
 In June, producer prices dropped 4.4 percent year on year.
                                
 Analysts said the data was mainly affected by commodity
prices and that it did not indicate signs of deflation in the
wider economy.
                                
 The statistics bureau said agricultural producer prices
dipped 1.7 percent on the month, and showed a 26.7 percent year
on year drop, decelerating from June's 27.9 percent fall.
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KEY POINTS:
(change in percent)       July       June       July forecast
 PPI
 month/month              -0.4        0.0       -0.3
 year/year                -4.9       -4.4       -4.8

(For full table of data........................[ID:nPRA004709])

- The monthly development in the producer price index (PPI)
included a 3.7 percent drop in prices of coke and refinery
products.
- Prices of vehicles fell 1.7 percent and prices of metals and
metal products dropped 0.8 percent.
-Prices of chemicals and chemical products rose 3.5 percent.
                                
 
                                
 COMMENT:
                                
 MICHAL BROZKA, ANALYST, RAIFFEISENBANK
                                
 "Looking at the current price development gives a similar
impression across the economy. The absence of inflationary
pressures will likely mean interest rates will stay low for a
number of months and raising (rates) will come next year."
                                
 
                                
 JIRI SKOP, ECONOMIC AND STRATEGY RESEARCH, KOMERCNI BANKA
                                
 "The annual declines should, in the coming months, continue
and the return to black numbers should take place next year."
                                
 "For the entire year, industrial prices should fall by 3
percent. In 2010 we expect a small growth of 1.5 percent as
commodity prices rise."
                                
 
                                
 PETR DUFEK, ANALYST, CSOB
                                
 "It's another decline in prices, which shows continuing low
demand for industrial producers... It is another argument for
the claim that inflation risks in the economy are zero.
                                
 "The same works for agricultural prices, so we can expect
another drop in inflation even deeper below the central bank
target."
                                
 "Risks of inflation are at the moment non-existent, and the
economic recovery is far ahead."
                                
 "For now the central bank will not be changing rates."
                                
 
                                
 PETR SKLENAR, ANALYST, ATLANTIK FT
                                
 "The movements are mainly driven by changes in prices of raw
materials, commodities... It is not something monetary policy
should react to."
                                
 "So far we do not see any deflation pressure."
                                
 
                                
 RADOMIR JAC, CHIEF ECONOMIST, GENERALI PPF ASSET MANGEMENT
                                
 "Leaders (of the decline) were prices of commodities, metals