Poland: Inflation rebounds from record low
August 14, 2013
In July, consumer prices rose 0.3% over the previous month, which was above the flat reading observed in June and contrasted market expectations of a 0.2% decline. According to the Central Statistical Office (GUS), an increase in prices for transport and housing were partially offset by lower prices for clothing and footwear.
Annual headline inflation rose to 1.1% in July from June's record low of 0.2%. The reading from July exceeded market expectations of a 0.5% increase. Despite the rise, inflation is still below the Central Bank's target of 2.5% with a tolerance margin of plus/minus 1.0 percentage point. Meanwhile, the core consumer price index, which excludes food and energy prices, stayed flat over the previous month. Annual core inflation, however, dropped to 0.9% in June (the latest month for which data are available).
The Central Bank expects inflation to end 2013 at 0.8% and 2014 at 1.2%. FocusEconomics Consensus Forecast panellists expect inflation to end this year at 1.1%, which is down 0.1 percentage points from last month's projection. In 2014, the panel expects inflation to accelerate to 2.1%.
Author: Carl Kelly, Economist