Czech industrial producer prices surprise market with 0.7% drop in Jan 2014, first decline in nearly 4 years

By bne IntelliNews February 24, 2014

Lower energy and mining costs pushed the Czech industrial producer price index down by 0.7% y/y in January 2014, defying market expectations for a 0.7% hike, data from the statistics office showed. This was the first annual decline since March 2010 and followed a 1.7% hike in December 2013.

Manufacturing producer charges, which have the strongest weight in the index, increased by 1.1% y/y in January, easing from a 1.3% rise in December, due to a slower growth in prices of transport equipment and of coke and refined petroleum products.

Prices of electricity, gas, steam and air conditioning declined 8.8% y/y in January, reversing a 3.5% y/y rise the month before, while water supply charges grew by 3.4%, slower than December’s increase of 5.7% y/y. After rising for two straight months, mining and quarrying charges fell by 3% y/y in January.

In monthly terms, industrial producer prices in the country dropped by 1.3% from December, when they edged up by 0.8%. This was the first-ever January decline in the country’s history mainly reflecting falling energy prices.

Agricultural producer prices fell for the sixth month in a row in January going down by 4%, softening from a 4.3% decline in the previous month. The decline in January came as crop prices shrank by 13.8%, while the growth in animal products prices speeded up to 8.1% from 6.4%. On a monthly basis, agricultural prices were 2.6% higher than in December, when they grew 2.5%.

Construction work prices inched down by 0.5% on the year but were 0.1% higher on the month in January, whereas prices of market services fell by 1.8% on an annual and by 0.5% on a monthly basis.

The PPI inflation in the Czech Republic eased to 0.8% in 2013 from 2.1% in 2012. The January data indicates that the consumer price inflation, which eased to more than a four-year low of 0.2% in the first month of 2014 will further decelerate in the following months. The Czech central bank expects headline inflation to ease to very low levels at the start of 2014, mainly reflecting lower energy prices, but the threat of deflation has probably 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.

Related Articles

Czech CPI buys huge Central European retail portfolio

Czech real estate investor CPI Group has bought a large portfolio of Central European retail assets, local media reported on January 17. The investor, which has grown its holdings rapidly since ... more

CEZ ignores Czech finance minister and re-elects CEO

The supervisory board at Czech power group CEZ ignored pressure from the finance ministry to dump the current management, local media report. Finance Minister Andrej Babis has been accumulating ... more

Japan’s Asahi buys a huge round in Central Europe

Asahi has beaten a host of regional heavyweights in the race to buy SABMiller’s Central and Eastern European beer brands, the Japanese brewer announced on December 13. The Asian giant said it ... more

Register here to continue reading this article and 2 more for free or purchase 12 months full website access including the bne Magazine for just $119/year.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

To continue viewing our content you need to complete the registration process.

Please look for an email that was sent to with the subject line "Confirmation bne IntelliNews access". This email will have instructions on how to complete registration process. Please check in your "Junk" folder in case this communication was misdirected in your email system.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

If you have any questions please contact us at sales@intellinews.com

Subscribe to bne IntelliNews website and magazine

Subscribe to bne IntelliNews website and monthly magazine, the leading source of business, economic and financial news and commentary in emerging markets.

Your subscription includes:
  • Full access to the bne content daily news and features on the website
  • Newsletters direct to your mailbox
  • Print and digital subscription to the monthly bne magazine
  • Digital subscription to the weekly bne newspaper

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

bne IntelliNews
$119 per year

All prices are in US dollars net of applicable taxes.

If you have any questions please contact us at sales@intellinews.com

Register for free to read bne IntelliNews Magazine. You'll receive a free digital subscription.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

IntelliNews Pro offers daily news updates delivered to your inbox and in-depth data reports.
Get the emerging markets newswire that financial professionals trust.

"No day starts for my team without IntelliNews Pro" — UBS

Thank-you for requesting an IntelliNews Pro trial. Our team will be in contact with you shortly.

Dismiss