Czech Industrial output declined for a second month in June, bolstering the case for an interest-rate cut as the economy struggles to exit a recession.
Industrial production fell 2.2 percent from a year earlier, compared with a 2.4 percent drop in May, the Prague-based Czech Statistics Office said in a statement on its website today. The reading was worse than the median forecast of a 2 percent decline in the Bloomberg survey of 13 analysts.
After cutting the benchmark two-week repurchase rate to a record low in June, the central bank’s board was split last week on whether to lower borrowing costs further as the economic outlook worsens. Two policy makers sought a cut to 0.25 percent, while the other four present at the meeting took a “wait-and- see approach,” Vice-Governor Vladimir Tomsik said.
The Czech economy fell 0.8 percent in the first quarter from the final three months of 2011, the second contraction in as many quarters, as households curbed spending in response to a worsening economic outlook across Europe. The economy relies on demand for cars, auto parts and electronics goods from the European Union, the market for about 80 percent of Czech exports.
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