Poland's producer price index (PPI) fell 0.9% year on year in January (chart), following a revised fall of 2.7% y/y in December, the country’s statistics office GUS said on January 22.

The PPI deflation has been in place since mid-2203, reflecting the still relatively low demand linked to the sluggish German economy and the domestic expansion still searching for sustained momentum, analysts say. 

The expectations are, however, for the indicator to arrive in positive territory sometime in early 2025. The index’s decline rate has been gradually lessening since August. 

Prices in the most-weighted manufacturing segment declined 0.7% y/y in January after falling 1.5% y/y the preceding month, the breakdown of the data showed.

Mining and quarrying prices fell 2.1% y/y in January after a revised fall of -6.2% y/y in December.

Electricity, gas and utility prices fell 2.2% on the year in January after declining a revised -10.7% y/y the preceding month.

The water supply segment saw prices expand 2.4% y/y in the first month, after a gain of 3.4% y/y in December.

In monthly terms, the PPI declined 0.1% after falling a revised 0.3% month on month in December.

The index fell 1.4% month on month in mining and quarrying while remaining unchanged in manufacturing. In the utility segment, prices fell 0.1% m/m while adding 0.2% m/m in water supply.

Meanwhile, Poland’s January CPI growth came in at 5.3% y/y after a gain of 4.7% y/y in December, GUS reported earlier this month. Headline inflation is expected at around 5% y/y in early 2025 before embarking on an incremental decline trend midway through the year or later.