Polish CPI grew 16.1% y/y in March (chart), the lowest reading since last August, Poland’s statistical office GUS showed on April 14.

The reading, which came in at 0.1pp below the flash estimate published by GUS in late March, eased as much as 2.3pp in comparison to the February data. Analysts agree it is likely the start of inflation’s gradual descent to high single figures towards the end of the year.

“The beginning of disinflation … is mainly due to the normalisation of energy prices and the effects of last year's high base,” PKO BP said in a comment on the GUS figures. 

High upward pressure persists on prices of food and in the categories making up core inflation (without food and energy), PKO BP also said.

“Core inflation growth remained high at an estimated 12%-12.1% y/y in March. This shows that inflationary pressure in the Polish economy persists on an elevated level,” Bank Millennium said.

The March inflation reading will not change much in the monetary policy of the National Bank of Poland (NBP). The NBP is expected to keep its reference interest rate on hold at 6.75% for the time being.

“We expect that in the coming months, the annual CPI growth will continue to fall to below 13% y/y halfway through the year and to 10% at the end of the year,” Santander Bank Polska said.

“We assume that the coming data will show the persistence of inflation and this will discourage the NBP from cutting interest rates this year,” it added.

Prices in the most-weighted food and non-alcoholic drinks segment grew 24% y/y in March, retaining the expansion rate seen the preceding month, the breakdown of GUS data showed. 

Price growth eased in other key segments. Housing and energy prices expanded 19.6% y/y in March after growing 22.7% y/y in February. Transport prices added just 3.9% y/y in the third month, their growth rate collapsing after a gain of 23.7% y/y in February.

In m/m terms, the CPI grew 1.1% in March, easing 0.1pp versus February, GUS data also showed.