Statisticians: Industrial producer prices at 15 year high
July saw year-on-year industrial producer prices grow by 7.8 percent, the biggest rise since November 2004, the Czech Statistics Agency announced on Monday. High price growth was also registered among agricultural producers and in construction work prices.
Industrial producer prices have been rising since February and their growth is increasingly speeding up, according to the head of the Statistics Industry Pricing and Foreign Trade Division of the Czech Statistics Agency Vladimír Klimeš.
“Prices in the coke and refined petroleum products sector, as well as prices of basic metals and fabricated metal products, which rose by 20 percent year-on-year, continue to have a significant impact on overall producer prices,” Mr Klimeš said on Monday.
In terms of year-on-year comparison, the main driver of the price rise was the metalworking industry, which has now overtaken the refining sector. Oil prices on the other hand have stabilised, which means that the inflationary effects of rising oil prices are likely to weaken, Komerční Banka analyst Michal Brožka told the Czech News Agency.
However, he said that there are still problems with subcontracting in other sectors which will likely have an effect on further price increases, although the pace of the rise should slow down.
According to statisticians, the prices of chemicals and chemical products rose by 37.7 percent, with the cost of wood, paper and printing growing by 17.9 percent.
Prices of food products, beverages and tobacco experienced a rise by 1.2 percent. The only decrease was registered in the cost of transport equipment, down by 1.1 percent, and in parts and accessories for motor vehicles which fell by 2.4 percent.
July also saw a record 1.6 percent rise in month-on-month prices – the most significant increase since January 2008. Construction prices rose by 1 percent in July, while the price of agricultural products fell by 1.8 percent.
As production prices rise, both Czech and foreign companies are also increasingly being forced to raise the cost of end-products being sold to customers. Experts therefore do not expect any slowdown in consumer inflation any time soon even if the Czech National Bank tightens its monetary policy.
According to patria.cz, the news site of Investment Bank Patria Finance, the situation will only begin to improve once there is a normalisation in global commodity markets and associated international transportation. However, this is still far on the horizon, according to Patria Finance.