Lower energy and mining costs pushed the Czech industrial producer price index down by 0.8% y/y in March 2014, slightly deeper than February’s 0.7% fall, data from the statistics office showed. The market was expecting a 0.6% annual drop for March.

Manufacturing producer charges, which have the strongest weight in the index, increased by 1% y/y in March, easing from 1.2% y/y the month before due to a weaker growth in food and transport equipment prices.

Prices of electricity, gas, steam and air conditioning declined by 8.8% y/y for the third month in a row in March, while water supply charges grew by 3.4%, also the same as in the previous two months. Mining and quarrying continued to fall deepening their annual decline to 4% in March from 3.1% in February.

In monthly terms, industrial producer prices in the country edged down by 0.2% in March, after staying flat in February.

Agricultural producer prices fell for the eighth consecutive month in March going down by 4.2% and softening from a 5% decline in the previous month. The decline came as crop prices shrank by 13.9%, while the growth in animal products prices quickened to 8.2% from 7.7% in February. On a monthly basis, agricultural prices edged up by 0.8% in March, following a 0.2% hike registered in the previous month.

Construction work prices stayed flat on the year in March but inched up by 0.2% on the month, whereas prices of market services fell by 0.5% on an annual basis but were 0.6% higher on the month.

The PPI inflation in the Czech Republic eased to 0.8% in 2013 from 2.1% in 2012. Data in the first months of the year indicates that the consumer price inflation, which stayed at more than a four-year low of 0.2% in March will remain muted in the following months. The Czech central bank has said that the threat of deflation has been averted thanks to the easing of the monetary conditions via the forex interventions. Inflation should return to the bank’s 2% target at the end of the year.