PRAGUE, April 30 (Reuters) - Czech industrial output dropped
by worse-than-expected 17.5 percent year-on-year in March, from
a 23.4 percent fall in February, the Czech Statistical Bureau
(CSU) said in a flash estimate on Thursday.
Analysts had forecast an 14.0 percent annual fall in March.
The Czech crown <EURCZK=> dipped to 26.733 to the euro by 0731
GMT, from 26.68 before the data.
Analysts said the figure was a disappointment mainly because
they had expected a scrap subsidy in Germany and other richer
European Union states to support the Czech car-building industry
and boost exports -- an effect that did not materialise.
The CSU, which started providing a flash estimate on
production this month, said the figure was based on data
captured before April 24 that included 73 percent of respondents
representing 82 percent of the survey sample in total revenues.
The statistics office will release full details on May 12.
****************************************************************
KEY POINTS:
(y/y change in pct) March Feb March forecast
Industrial output -17.5 -23.4 -14.0
- Seasonally adjusted output was down 20.9 percent year-on-year.
- Industrial sales fell 14.7 percent annually in current prices
in March.
- The value of industrial orders dropped 16.7 percent
year-on-year in March, of which foreign orders fell 15.5
percent.
COMMENT:
DAVID MAREK, CHIEF ECONOMIST, PATRIA FINANCE
"The first release did not bring any hope that the Czech
economy reached the bottom in the current recession."
"Five consecutive months of double-digit falls of industrial
output are a strong argument for the central bank to relax
monetary conditions again after a brief pause caused by crown
volatility."
"It can happen next week. Our guess is a 25 basis point cut
that can be repeated once again in June."
JAN VEJMELEK, HEAD OF ECONOMIC AND STRATEGY RESEARCH,
KOMERCNI BANKA
"It was a disappointment but was better than in January and
February, so it shows some stabilisation."
"It will probably be due to the better situation in the car
industry. Skoda has started to produce more... This is caused by
the scrap subsidy abroad."
"We will have to see how this figure compares to reality...
in the new few weeks (when the final figure is released)."
SIMON QUIJANO-EVANS, EMEA ECONOMIST, CHEUVREUX
"The bottom line is that I think there will be some
disappointment. There would have been more expectations of
better figures because the German scrap subsidy would have
supported exports. So maybe we'll see that spill over into the
April figures."
LARS CHRISTENSEN, ECONOMIST, DANSKE BANK
"The numbers are quite weak and it further confirmation that
Czech industry is feeling the impact of the global crisis. We
believe that these numbers should give further arguments for the
doves on the CNB's board, and we continue to expect a rate of 25
basis points at next week's CNB board meeting."
LINKS:
- For further information on March 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)
