Actual (May): 0.0% mom; 1.7% yoy
Consensus: 0.0% mom; 1.7% yoy
Previous (Apr): 0.0% mom; 2.2% yoy
Industrial producer prices did not change in May as expected. Disinflation already lowered annual change in PPI below 2%. Farmers’ prices declined by 2.6% yoy, other sectors are also in deflation. As for prices in industrial sectors, the most significant impact came from lower oil prices that translated into the decline in prices of refinery products by 3.8% mom.
However, this impact was offset by an increase in prices of cars and related parts (1.2% mom) and machinery (1.0% mom). Disinflation decreased industrial PPI from 6% in the first half of 2011 below 2%now. This fact together with deflation in other producer price indexes supports an idea of easing monetary policy. The Czech National Bank may cut its rates already at the end of June.