PRAGUE, Nov 15 (Reuters) - Czech industrial producer prices
were unchanged month-on-month in October and rose by 2.6 percent
year-on-year, a touch below market expectations, data showed on
Monday.
Analysts had forecast a 0.1 percent month-on-month increase
in industrial PPI and a 2.7 percent year-on-year growth.
<CZ/ECON04> <CZ/ECON15> <ECONCZ>
In September, producer prices grew by 0.3 percent
month-on-month and 2.4 percent year-on-year.
The month-on-month development was affected by a 0.6 percent
growth in food prices, which was offset by a 0.7 percent drop in
prices of coke and refining products.
Prices of vehicles also fell by 0.7 percent.
The statistics bureau said agricultural producer prices rose
by 2.3 percent on the month, and showed its third annual growth
in a row with 21.1 percent, a sharp turnaround from a series of
falls in the previous two years.
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KEY POINTS:
(change in percent) Oct Sept Oct forecast
PPI
month/month 0.0 0.3 0.1
year/year 2.6 2.4 2.7
(For full table of data........................[])
- In the year-on-year comparison, producer prices were driven by
a 24.4 percent rise in prices of coke and refinery products, the
statistics office said.
- Prices of chemicals rose by 11.4 percent and prices of metal
prices were up by 9.6 percent.
- Construction work prices flat month-on-month and dropped by
0.3 percent year-on-year.
- Prices in the service sector rose by 0.3 percent on the month
and fell by 1.2 percent year-on-year.
COMMENTARY:
JIRI SKOP, ECONOMIC AND STRATEGY RESEARCH
"The development in agricultural producers prices is
interesting from the monetary policy point of view and suggests
future inflation pressures in consumer prices."
"Although consumer inflation is moderately below the central
bank forecast, this deviation should be erased in the coming
months."
VOJTECH BENDA, SENIOR ANALYST, ING COMMERCIAL BANKING
"What I found remarkable was the development in agricultural
prices which showed a relatively significant jump."
"Food prices copy agriculture prices with a delay of some
three month so this is a clear signal that food prices will
strongly contribute to growth in consumer inflation in the
beginning of next year."
"This should not have an immediate impact on interest rates
but... it is a factor that increases inflation expectations in
the future and the central bank could react faster than what is
implied in its current forecast."
DAVID MAREK, CHIEF ECONOMIST, PATRIA FINANCE
"There is no big surprise. The key development is given by
prices of oil, metals and agricultural producers prices."
"The data confirm the scenario of a delayed increase in
interest rates, which means in the second half of next year."
"Annual inflation in producer prices is rising but the
short-term one, meaning in the monthly development, shows it is
not a harmful thing and the detailed structure shows that it is
mainly inflation imported via commodity and food prices, which
the central bank cannot affect."
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).
- Octoberr consumer inflation [] []
- September industrial output figures []
- Report on last Czech c.bank rate decision......[]
[] [] []
LINKS:
- For further details on October 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 Jana Mlcochova; Editing by John Stonestreet,
Jason Hovet)
