Poland: Annual consumer prices drop below zero for the first time in more than 30 years in July
August 13, 2014
In July, consumer prices fell 0.2% compared to the previous month. The reading came in below the flat reading that was observed in June, but met market expectations. According to the Central Statistical Office (GUS), the monthly drop was driven primarily by lower prices for clothing and footwear.
On an annual basis, consumer prices dropped 0.3% in July, which contrasted the 0.2% increase recorded in June. The reading represented the first annual drop in prices in more than 30 years. Inflation is drastically well below the Central Bank’s target of 2.5% with a tolerance margin of plus/minus 1.0 percentage points. Meanwhile, the core consumer price index, which excludes food and energy prices, increased 0.2% over the previous month in June (the latest month for which data are available). Annual core inflation increased from 0.8% in May to 1.0% in June.
Author: Carl Kelly, Economist