Czech annual industrial producer price inflation accelerated to a one-year high of 1.7% in December 2013 from a 0.7% hike the month before, data from the statistics office showed. The reading was above market expectations for a 1.3% y/y growth.

Manufacturing producer charges, which have the strongest weight in the index, increased by 1.3% y/y in December, swinging from a 0.2% y/y drop in November, due to a strong growth in transport equipment prices.

Prices of electricity, gas, steam and air conditioning increased by 3.5% y/y, easing from a 3.8% hike in November and water supply charges grew by 5.7% y/y. Mining and quarrying charges advanced for the second month running in December and at a slightly faster pace than in November – up by 0.3% compared to a 0.2% rise in November.

In monthly terms, industrial producer prices in the country edged up by 0.8% for the second straight month in December.

Agricultural producer prices fell for the fifth month in a row in December going down by 4.3%, softening from a 5.2% decline in the previous month. The decline in December came as crop prices shrank by 11.5%, while the growth in animal products prices speeded up to 6.4% from 5.9%. On a monthly basis, agricultural prices were 2.5% higher than in November, when they grew 2.9%.

Construction work prices decreased by 0.7% y/y and stayed flat on the month in December and prices of market services fell by an annual 1.4% and by 0.6% on a monthly basis.

The PPI inflation in the Czech Republic eased to 0.8% in 2013 from 2.1% in 2012. The December data indicates that the consumer price inflation, which quickened to 1.4% in December from 1.1% in November, will further strengthen in the following months. Prices will also increase as a result of the central bank’s interventions on the currency market aimed at weakening the koruna and bringing inflation up to the bank’s 2% target.