Producer price index (PPI) dropped 1.5 percent in December and 0.2 percent y/y, exactly as we predicted. Fall in crude oil and refinery products prices together with prices of metals and chemical and metallurgy products were the main contributors to the PPI slump. Czech inflation is inevitably influenced by the global economy – just like the Czech economy. Recession in the US, Eurozone and Japan, significant slowdown in China and other emerging markets had taken its toll on commodity prices which dropped significantly. This factor was decisive for inflation slowdown (or deflation, as the case may be) in many countries.