CZECHIA: CNB Comment on May Inflation Data

The Czech National Bank has commented on this morning's inflation figures which showed headline CPI moderated to +2.6% Y/Y in May after approaching the upper end of the +/- 1pp tolerance band around the +2.0% Y/Y target in April. Consensus was looking for a smaller downtick to +2.8%. See the CNB's comments below:

• "Annual inflation was just 0.1 percentage point higher in May than the CNB’s spring forecast. The visible upward deviation from the forecast recorded in April this year thus decreased substantially with the subsequent developments in May." 
• "The persistence in May of only a small positive difference compared to the forecast continued to be driven mainly by volatile food prices, which fell less than expected year on year." 
• "Growth in administered prices was also somewhat stronger than forecasted." 
• "Significantly lower growth in fuel prices and a further slight drop in core inflation had the opposite effect."