Inflation in Poland

Poland - Inflation (end of period)

Inflation ticks up in November

Consumer prices inched up 0.1% over the previous month in November, following October’s 0.2% uptick, according to provisional data released by the Poland’s Statistical Institute (GUS). Higher prices for food and non-alcoholic beverages, utilities and fuels drove the increase. Core consumer prices in October (the latest month for which data is available) rose 0.3% in month-on-month terms, up from September’s 0.2% rise.

Inflation ticked up to 2.6% in November from 2.5% in October, and thus moved marginally above the midpoint of the Central Bank’s target range of 2.5% plus or minus 1.0 percentage point. For its part, core inflation came in at 2.4% in October, matching September’s reading, which had marked the highest reading since April 2012.

All told, annual average inflation inched up from October’s 2.0% to 2.1% in November, the highest print since June 2013.

Looking ahead, Rafal Benecki and Jakub Rybacki, Poland chief economist and economist at ING respectively, stated:

“We expect CPI to peak in 1Q around 3.5% YoY. Core inflation should remain a major contributor, fuelled by demand pressures and an increase in labour and energy costs for enterprises. […] Inflation should return to the central bank target (2.5% YoY) in the second half of 2020 due to a lower contribution from food prices. The growth structure should rely solely on core inflation. Such a situation suggests there is a risk of overshooting the inflation target's upper band (CPI above 3.5% YoY) in the event of external or domestic supply shocks (e.g. weaker crops, disruptions on the global oil markets)”.

FocusEconomics Consensus Forecast panelists expect inflation to average 2.5% in 2020, which is unchanged from last month’s projection. For 2021, the panel sees inflation averaging 2.6%.