Czech inflation fell surprisingly sharply in May from 2.5% to 2.1% yoy. This was below our estimate and the market consensus, both at 2.3% yoy. While headline inflation was 0.1pp above the CNB forecast in April, it aligned with the central bank’s expectation in May. Annual inflation surprised on the downside also in other Central European countries, including Poland (a decline from 3.2% to 3.1% yoy compared with an expected 3.6%) and Hungary (a drop from 2.1% to 1.8% yoy compared with an estimated 2.2%).