INSTANT VIEW 5-Czech Jan CPI higher than fcst, drops yr/yr

                                
 PRAGUE, Feb 9 (Reuters) - Czech consumer prices fell in
January but were still above expectations, rising at an annual
rate of 2.2 percent, and the jobless rate jumped almost a
percentage point from the previous month, data showed on Monday.
                                
 Analysts in a Reuters poll had forecast prices grew 1.7
percent on an annual basis. The actual figure was near the
bottom of the central bank's 2009 target, which is for annual
inflation of 3 percent, plus or minus 1 percentage point.
                                
 The unemployment rate rose to a higher-than-expected 6.8
percent of the workforce in January, the Labour Ministry said,
from 6.0 percent a month earlier and 6.4 percent expected by
analysts.

****************************************************************
KEY POINTS:
(pct change)          Jan          Dec          Jan forecast
 month/month          1.5         -0.3          1.1
 year/year            2.2          3.6          1.7

 Details of January inflation data...............[ID:nPRA002359]
 Details of January jobless data.................[ID:nPRA002360]

- The monthly price growth was mainly due to an increase in
housing costs, while fuel prices rose 4.7 percent.
- Food prices edged up 1.6 percent month-on-month.
- Tobacco product prices rose 0.8 percent month-on-month.

                                
 COMMENT
                                
 JIRI SKOP, ANALYST, KOMERCNI BANKA
                                
 "It was in line with our expectations. What was surprising
was the higher impact of regulated prices."
                                
 "Core inflation will decelerate in the months ahead."
                                
 "The structure (of the data) from the monetary policy point
of view is showing inflation pressures from the real economy and
delayed impact of the strong crown are putting downward pressure
on inflation."

                                
 VOJTECH BENDA, SENIOR ECONOMIST, ING WHOLESALE 
                                
 "The higher than expected inflation growth was mainly
attributable to the first-round effects of pick-up in regulated
prices... However, the core inflation has remained negative in
year-on-year terms."
                                
 "In our opinion the potential inflationary effects stemming
from the weaker currency (which the CNB mentioned last week)
could unlikely outpace the disinflation trend driven by widening
negative output gap."
                                
 "As a result more rate cuts towards 1.25 percent seem likely
in the coming months."
                                
 
                                
 MARTIN LOBOTKA, ECONOMIST, CESKA SPORITELNA       
                                
 "It is slightly above our expectations but it's no big
surprise."
                                
 "It is rather unemployment that has surprised."
                                
 "What is important is that year-on-year inflation is
falling, and of course there will be a strong disinflation
effect in the first half of the year due to fuel prices so we
may as well get below 1 percent."
                                
 "I do not expect the central bank to base its decision on
this one number. Rates may be at their bottom. Maybe there will
be one more (25-basis-point) cut and that's it."
                                
 
                                
 DAVID MAREK, CHIEF ECONOMIST, PATRIA FINANCE
                                
 "It was something expected... Inflation is something that
should leave the doors open for lower interest rates."
                                
 "Inflation is something that is not a subject of concern
right now in the Czech economy. Maybe in the middle of the year,
inflation can be close to zero, and even some thoughts about
deflation can emerge."

BACKGROUND:
- The central bank decreased the key two-week repo rate by 50
basis points to 1.75 percent <CZCBIR=ECI> on Feb. 5.
- Report on last Czech c.bank rate decision.........[ID:nL54762]
                                
               [ID:nL5536584] [ID:nPRA002354] [ID:nPRG001229]
- The central bank (CNB) targets headline inflation, which it
seeks to keep at 3 percent year-on-year, allowing for
fluctuations by plus/minus one percentage point from this level.
- The CNB's quarterly prediction sees consumer price inflation
of 1.4 percent in first quarter of 2010 and 2.1 percent in the
second quarter of 2010. Consumer inflation net of impact of
indirect tax changes is seen at 1.4 percent in the first quarter
of 2010 and 2.1 percent in second quarter of 2010.

LINKS:
- For further details on January other past inflation data,
Reuters 3000 Xtra users can click on the Czech Statistical
Bureau's website:
                                
 http://www.czso.cz/eng/csu.nsf/kalendar/2004-ISC

- For LIVE Czech economic data releases, click on       <ECONCZ>
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- For Czech money markets data click on                <CZKVIEW>
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- Czech benchmark state bond prices                   <0#CZBMK=>
- Czech forward money market rates                      <CZKFRA>

 (Reporting by Jana Mlcochova)