The producer price index in January increased by 1.9% m/m and producer price inflation reached 6.0% y/y, which is the highest number since March 2005. The main contributors to this increase were from the food and electricity sectors, gas and water. The coal price moved up significantly and producer prices were impacted by increases in the price of oil.
The PPI in January came in above estimates and its growth was lead by one-off changes and short term factors. That’s why it should not cause any major monetary policy change by the CNB. Thus, we believe interest rates have reached their peak this year and should remain stable in the following months.