Poland's producer price index (PPI) grew 3.9% y/y in March after expanding 2% y/y in February, the country’s statistics office GUS said on April 21.
The March reading marks the third consecutive expansion of the index after a 10-month streak of falls or zero growth in factory gate prices, an effect of the overall slowdown in economic activity in the wake of the COVID-19 (coronavirus) pandemic.
As the economy is picking up now, the accelerating growth of the PPI largely owes to the weak zloty – which has lost nearly 2% to the euro and 0.5% to the US dollar since the beginning of the year – and the growing commodity prices.
“We expect further increases in PPI growth dynamic in the coming months, due to more expensive commodities and disruptions in supply chains,” Santander Bank Polska wrote.
That will have an impact on headline inflation, ING says. "Our forecast [is] that the rebound of the Polish economy will accompany increasing cost pressures, which should lead to inflation rising above 4% y/y."
Data breakdown shows that prices in the most-weighted manufacturing segment grew 3.3% y/y in March after adding a revised 1.6% y/y in the second month.
Mining and quarrying prices jumped 23.3% y/y (+15.4% y/y in February following revision) in March.
Electricity, gas, and utility prices accelerated growth to 2.3% on the year in the third month after growing a revised 2.2% y/y in February.
The water supply segment saw prices gain 3.5% on the year, 0.2pp above the revised February reading.
In monthly terms, the PPI grew 1.3% after adding a revised 1% in February, data show.
The PPI gained 4.1% m/m in mining and quarrying while growing 1.3% m/m in manufacturing. The index expanded 0.2% m/m in the utility segment. There also was an expansion of 0.5% m/m in water supply.