Polish CPI eases expansion to 2.8% y/y in August, flash estimate shows

Polish CPI eases expansion to 2.8% y/y in August, flash estimate shows
By bne IntelliNews August 30, 2019

Poland's consumer price index (CPI) grew 2.8% y/y in August, easing 0.1pp versus the annual reading from July, statistics office GUS announced in a flash estimate on August 30.
 
August was the first month to see inflation weaken after half a year of gradual acceleration. CPI remains above the 2.5% red line drawn by the National Bank of Poland to mark target inflation – although still clearly below the upper end of deviation from it, set at 3.5%. 

The consensus remains that monetary policy makers will continue keeping Poland’s interest rates at the record low 1.5% at which they have lingered for over four years now. With CPI on the rise, however, the Monetary Council's hawks stand on firmer ground to push for tightening. 

The pressure for hiking rates should become stronger if predictions by some analysts for prices to begin acceleration again in late 2019 and into 2020 prove correct.

Broken down by main segments, a growth of 7.2% y/y in prices of food and non-alcoholic drinks drove CPI expansion in August. Prices of fuels for private means of transport fell 0.3% y/y. Prices of energy retreated 1.4% y/y.

In monthly terms, CPI did not change. Prices of food and non-alcoholic drinks fell 0.3% m/m. Prices of fuels for private means of transport fell 1.1% on the month while prices of energy stayed flat.

Data

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