Key facts
- Czech CPI inflation slowed to 2.1% year-over-year in May.
- The May inflation rate was below the consensus estimate of 2.3%.
- Core inflation is estimated to have eased to 2.8% year-over-year.
- The Czech National Bank (CNB) forecast for inflation was met precisely.
- The CNB is unlikely to hike rates in June following this print.
Consumer price index (CPI) inflation in the Czech Republic decelerated to 2.1% year-over-year in May, falling below the market expectation of 2.3%. This figure precisely matched the forecast provided by the Czech National Bank (CNB). The slowdown was observed across various price categories, including volatile items and core inflation. Core inflation is estimated to have eased to 2.8% year-over-year, a decrease of 0.1 percentage points from the previous month. Analysts suggest that this inflation print should alleviate market speculation regarding a potential rate hike by the CNB in June. While inflation risks are anticipated to emerge in the second half of the year, the current data suggests the CNB is likely to maintain its current interest rate policy at least until August.