Poland: Inflation surges in March to the highest level in more than two years
April 13, 2011
In March, consumer prices added 0.9% over the previous month, well above the 0.2% increase observed in February. According to the Central Statistics Office (GUS), the monthly reading was the result of substantial price increases for food (+1.7% month-on-month), clothing and footwear (+3.1% mom) as well as transport (+1.6% mom). As a result, annual headline inflation jumped to 4.3% in March, well above both the 3.6% inflation rate registered in February and market expectations of a more moderate 3.9%. Inflation is currently at its highest level since September 2008, far exceeding the Central Bank's target of 2.5% with a tolerance margin of 1.0 percentage point. Annual average inflation increased a notch from 2.7% in February to 2.8% in March. Core inflation, which excludes items sensitive to supply shocks like food and energy, rose from 1.6% in January to 1.7% in February. According to the Inflation Report from March 2011, the Central Bank estimates that inflation will end the year at 3.2%, before easing to 2.8% in 2012.