Poland’s core inflation, which measures price growth without food and energy, expanded 12% y/y in February (chart), adding 0.3pp to the January reading, the National Bank of Poland (NBP) said on January 16.
The core inflation growth rate thus picked up from an expansion of 0.2pp to 11.7% y/y in January. That was in line with a surge in the CPI, which came in at 18.4% in the twelfth month, adding as much as 1.8pp to the preceding month’s reading.
Inflation is currently expected to begin easing – albeit very slowly – from March on, although the average inflation in 2023 appears certain to remain in double digits even if only just.
How exactly the disinflation trend - much-trumpeted by the government in an election year - will shape up remains to be seen. Some analysts caution against putting too much hope in fast weakening of price growth in 2023.
“The data show much greater inflation inertia than predicted,” Santander Bank Polska said.
“The price momentum is still very strong and shows no signs of abating. These data suggest a higher inflation rate at the end of 2023 than we thought and reduce the probability of reaching levels that could make the NBP think about rate cuts,” it added.
The central bank’s reference rate has now remained at 6.75% since September.
In m/m terms, core inflation grew 1.3% in February, adding 0.4pp to the January reading, the NBP data also showed.