PRAGUE, Feb 11 (Reuters) - Czech consumer prices rose by 1.3

percent in January versus a month earlier, putting annual

inflation at 1.9 percent, data showed on Monday.

The yearly figure was below the 2.1 percent median forecast

in a Reuters poll and marked a steep slowdown from December's

2.4 percent.

The annual rate was just below the central bank's 2.0

percent target and its 2.0 percent forecast. Having cut interest

rates to 0.05 percent, the bank is considering other potential

ways of easing monetary policy but it took a slightly less

dovish stance at a meeting earlier this month.

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KEY POINTS:

CONSUMER INFLATION

(pct change) Jan Dec Jan fcast

month/month 1.3 0.1 1.5

year/year 1.9 2.4 2.1

Details of January inflation data...............

COMMENTS:

DAVID MAREK, CHIEF ECONOMIST, PATRIA FINANCE

'It was slightly lower than expected. Headline inflation is

below 2 percent, the target of the central bank, so core

inflation is still in negative figures.'

'Everything is calling for easing monetary conditions. Maybe

we can see a reversal of (central bank Governor Miroslav)

Singer's words about the crown and the possibility of mentioning

forex interventions again.'

DETAILS:

- The monthly rise was mainly driven by a 1 percentage point

increase in the value added tax rates (VAT) as of January to 15

percent and 21 percent, the bureau said.

- It was also driven by the rise in housing, food and

non-alcoholic beverage prices.

- The yearly number was affected by a more marked monthly rise

in January 2013 than in 2012.

- The annual slowdown was due to a deceleration in most parts of

the consumer basket, the stats bureau said, pointing

particularly to the slowdown in the rise of rents.

BACKGROUND:

- The central bank (CNB) cut the key two-week repo rate by 20

basis points to 0.05 percent on Nov. 1, 2012.

- Report on last Czech c.bank rate decision......

- The central bank targets headline inflation, which it

seeks to keep at 2 percent year-on-year, allowing for

fluctuations by plus/minus one percentage point from this level.

- The CNB's quarterly prediction sees consumer price inflation

of 1.7 percent in the first quarter of 2014 and at 1.7 percent

in the second quarter of 2014.

- The central bank next meets on interest rates on March 28.

LINKS:

- For further details on January and other past inflation data,

Reuters 3000 Xtra users can click on the Czech Statistical

Bureau's website:

http://www.czso.cz/eng/redakce.nsf/i/home

- 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 and Jana Mlcochova)

Keywords: CZECH INFLATION/

(prague.newsroom@thomsonreuters.com)(+420 224 190 477)(Reuters Messaging: mirka.krufova.thomsonreuters.com@reuters.net)

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