Polish CPI grew 2.4% y/y in February, the annual growth rate easing 0.2pp versus the revised annual reading the preceding month, the statistical office GUS said in a preliminary estimate on March 15.

Inflation likely reached bottom in February and is now expected to climb up towards the upper range of the central bank’s deviation band from the inflation target, analysts say. 

“Inflation fell below the NBP target but, in our opinion, it will not stay there long. The fall was driven by non-basic categories: a decline in prices of energy, slower growth in fuel and food prices,” PKO BP noted.

Prices grew 0.6% y/y in food, non-alcoholic and alcoholic drinks, and tobacco products category, GUS data show. That marked easing of 0.7pp versus the y/y reading from January.

Housing prices, including prices of energy, expanded 7.6% y/y in February against growth of 6.4% y/y the preceding month. The transport segment saw prices decline 1.6% in annual terms, compared to a drop of 4% y/y in the first month.

“Inflation likely bottomed out in February and should gradually begin to increase in coming months and move in the upper bound of the central bank’s inflation target. The base effect from fuel prices’ collapse last year will likely push headline figure up in Apr-May 2021,” Erste said in a comment.

“We see headline CPI on average at 3% in 2021. Despite increased inflation throughout the year, we expect the National Bank of Poland to remain on hold at least until the end of Governor’s Glapinski term in mid-2022 and likely until the end of next year,” the Austrian bank added.

In monthly terms, CPI expanded 0.5% in February, a slowdown after expanding just 1.3% on the month in January, GUS data also show.