INSTANT VIEW 3-Czech June retail sales show unexpected drop
PRAGUE, Aug 4 - Czech retail sales fell 3.5 percent
year-on-year in June, missing expectations for 0.5 percent
growth, data showed on Thursday.
The statistics office said the figure was mostly driven by
drops in the automotive segment and in retail.
Analysts said the data indicated extremely weak domestic
demand in the Czech Republic would continue to impact growth and
that the central bank could postpone tightening interest rates
from a record low 0.75 percent until the start of 2012.
The Czech crown eased a touch to 24.26 to the euro
from 24.244 after the data.
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KEY POINTS:
(change in percent) June May June forecast
RETAIL SALES (y/y) -3.5 3.2 0.5
(m/m) -0.1 -3.5 n/a
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Details of April sales data
COMMENTARY:
DAVID MAREK, CHIEF ECONOMIST, PATRIA FINANCE
'Retail sales were disappointing. The main impact came from
a significant fall in automobile sales.'
'It falls into the context of weak domestic demand, which
developments on the labour market are not supporting. Real wages
are practically stagnant and unemployment is falling only very
moderately. On the side of domestic consumption, the Czech
Republic will not receive support in the second quarter either,
so it's possible the growth result will also be a disappointment
to the market.'
'It indicates that interest rates should not move now and
the moment of tightening monetary policy will probably be
postponed further into the future. Probably in to the first
quarter of next year.'
JAROMIR SINDEL, CHIEF ECONOMIST, CITIBANK, PRAGUE
'Month-on-month it was quite a marked decrease. We will see
particularly in the next few months... how industry and other
sectors react in employment.'
'So far employment is quite supportive for retail sales, but
in the second half of the year, despite seeing maybe another
minor improvement in employment, the proposed fiscal reforms are
likely to keep retail sales subdued.'
'The message for monetary policy is quite clear: to keep
rates unchanged and there is no reason to hurry.'
LARS CHRISTENSEN, CHIEF ANALYST, DANSKE BANK
'Terrible numbers! If anything the CNB should cut rates
right now. That of course is not going to happen.'
MORE DETAILS:
- The headline, unadjusted figure includes fuel sales.
- Seasonally-adjusted sales including cars and repairs
dipped by a real 0.1 percent month-on-month. Year on
year, when adjusted for working days, they fell 3.5 percent in
June.
-Seasonally-adjusted sales of cars and repairs rose by
a real 0.4 percent month-on-month. Year on year, they
fell by 8.3 percent in June, when adjusted for working
days.
- Seasonally-adjusted sales including fuels decreased by a
real 0.3 percent month on month and they fell by an
annual 1.0 percent, working day adjusted.
BACKGROUND:
- June consumer inflation
- June industrial output
- Report on last Czech c.bank rate decision......
LINKS:
- For further details on June retail sales and past data,
Reuters 3000 Xtra users can click on the Czech Statistical
Bureau's website:
http://www.czso.cz/eng/csu.nsf/kalendar/2004-slu
- For LIVE Czech economic data releases, click on
- Instant Views on other Czech data
- Overview of Czech macroeconomic indicators
- Key data releases in central Europe
- For Czech money markets data click on
- Czech money guide
- Czech benchmark state bond prices
- Czech forward money market rates
(Reporting by Mirka Krufova; editing by Michael Winfrey)
Keywords: CZECH RETAIL/
(mirka.krufova@thomsonreuters.com)(+420 224 190 477)(Reuters Messaging: mirka.krufova.thomsonreuters.com@reuters.net)
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