In May, Belgian CPI inflation dropped slightly, from 3.41% Y/Y to 3.35% Y/Y. On a monthly basis however, CPI inflation rose by 0.33% M/M, the eleventh consecutive increase. The details show that price increases were led by electricity, flowers, nonalcoholic beverages and cars, while prices of fuels, vegetables and package holidays fell in May. Excluding energy, Belgian CPI inflation dropped from 1.74% Y/Y to 1.70% Y/Y. In Spain, CPI inflation (EU Harmonised) fell from 3.5% Y/Y to 3.4% Y/Y in May, which was in line with expectations. Details for Spain are not yet available. While Belgian and Spanish CPI fell only slightly, we continue to believe that the first estimate of euro zone CPI inflation will surprise on the downside. The consensus is looking for a stabilization in HICP at 2.8% Y/Y in May, but we believe that a downward surprise is highly likely to 2.7% Y/Y or even 2.6%Y/Y, easing somewhat the pressure on the ECB to raise rates further in the coming months.