Czech industrial producer prices stagnated on an annual basis in August 2014 ending a seven-month declining streak as a stronger growth in manufacturing charges offset declining mining costs, data from the statistics office showed on September 16. The reading was in line with market expectations.

Manufacturing producer charges, which have the strongest weight in the index, increased by 2.1% y/y in August, speeding up from a 1.8% hike the month before. The growth was supported by rising prices in all sub-indices except for food products, beverages and tobacco prices that edged down by 0.5% y/y.

Prices of electricity, gas, steam and air conditioning declined by 8.6% y/y in August, following an 8.7% drop in July, while water supply charges grew by 3.4% for the eighth straight month. Mining and quarrying prices continued to fall deepening their annual decline to 3.6% in August from 3% in the previous month.

In monthly terms, industrial producer prices in the country also stayed unchanged from July when they ticked higher by 0.3% m/m.

Agricultural producer prices fell for the 13th consecutive month in August but at the softer rate of 1% y/y than July’s 3.2% y/y. The decline came as crop prices shrank by 8.1%, while the growth in animal products prices weakened to 6.7% from 8.1% in the previous month. On a monthly basis, agricultural prices dropped by 2.5% in August, the same as in July.

Construction work prices picked up 0.1% on the month and were by 0.5% higher on the year in August. Prices of market services went up 0.1% from July and grew 1.4% on an annual basis.

The PPI inflation in the Czech Republic eased to 0.8% in 2013 from 2.1% in 2012. Data so far in 2014 indicates that the consumer price inflation, which accelerated to 0.6% y/y in August from 0.5% y/y in July, will stay low 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 in the second half of 2015, according to the bank’s current forecast.