(Repeats story published on Sept 1)
*What: Czech CPI, industrial output, retail sales
*When: CPI on Sept 8, output on Sept 10, retail sales on
Sept 16
*Inflation seen easing, retail sales and output data to
improve <CZ/ECON04>
By Mirka Krufova
PRAGUE (Reuters) - Falling food and fuel costs are likely to
have driven the Czech Republic's August inflation rate further
below the nine-year highs it hit at the beginning of the year, a
Reuters poll showed on Monday.
A Reuters poll of 12 analysts showed they expected the
annual inflation rate to have eased to 6.6 percent last month,
from 6.9 percent in July. It was seen flat on a monthly basis.
"We expect the drop in inflation mainly due to a decline in
price of fuels," said Atlantik FT chief economist Petr Sklenar.
He said the main driver of inflation was a pick-up in the
price of cigarettes -- a delayed effect of a January excise tax
hike after retailers sold out of stockpiles of cheaper tobacco.
Annual inflation peaked at 7.5 percent in January, prompting
the central bank to raise borrowing costs one last time in a
125-basis-point tightening cycle which started in May 2007.
However, the central bank became the region's first to
loosen monetary policy when it cut rates <CZRP=> <CZCBIR=ECI> by
a quarter point to 3.5 percent on Aug. 7, arguing that the
inflation rate would fall back to target next year.
Czech central bank Governor Zdenek Tuma said on Friday he
expected annual inflation to drop to 3 to 3.5 percent in the
first quarter of 2009 [].
"The inflation reading will not likely change the outlook
for another interest rate cut this year. But external factors
are likely to play a key role," said Citibank economist Jaromir
Sindel said.
Falling prices will make it possible for the central bank to
focus on growth, which has shown signs of losing steam due to a
drop in consumer spending at home and dampened demand from the
euro zone, the main export market for Czech goods.
However, further loosening could be deferred if the crown
currency extends its losses, Sindel said. Expectations of rate
cuts have caused the crown to shed 3.5 percent against the euro
from July's record high.
The poll also predicted a recovery in Czech industrial
output and retail sales in July, following poor figures in June,
but analysts said the improvement in the figures was due to a
one-off calendar effect.
"The industrial output and retail sales data in July should
be significantly affected by a calendar effect -- three extra
working days," Sklenar said.
For a TABLE with poll forecasts, click on []
(Reporting by Jana Mlcochova, writing by Jason Hovet, editing
by Swaha Pattanaik)
