Actual (Oct): 0.0 % m/m, 5.6 % y/y
Consensus: 0.0 % m/m, 5.6 % y/y
Previous (Sep): 0.2 % m/m, 5.5 % y/y
Inflation in producer prices remains quite high. However, it has been stable in the recent months and the prices stagnated in October compared with the previous month. The index was pushed higher by prices of food, coke and petroleum products and vehicles. But this effect was offset by a decrease in prices of chemicals, raw materials and electric devices.
As producer prices are more or less stable, they do not pose a big risk for CPI. Moreover, growth of consumer prices will remain limited due to the weak domestic demand. We expect the disinflation in producer prices to continue, helped by base effect. The weaker koruna may potentially hinder the process but so far the currency is not a big problem. The PPI data should be neutral for monetary policy. We do not expect any impact on financial markets either.