Polish CPI surged 4.3% y/y in April, the annual inflation rate picking up 1.1pp versus the preceding month, statistical office GUS said on April 30. 

The sharp increase surprised the market once again, landing 0.4pp above the consensus. The flash reading for April moves this year’s inflation trajectory further up in effect, although analysts remain confident that the central bank will keep its ultra-dovish policy until mid-2022 at least. 

The main inflation drivers were the fast-rising prices of fuels, which surged off last year’s pandemic-induced low base due to growth in oil prices, GUS data indicated. Fuel prices jumped 28.1% y/y in April, compared to an expansion of 7.6% y/y the preceding month.

Food prices increased 1.2% y/y in April after adding 0.5% y/y in March. Growth in energy prices eased to 3.9% in annual terms in the fourth month after expanding 4.2% y/y in March. 

Unlike in the preceding months, core inflation likely eased in April, analysts say. Detailed inflation data will be released in mid-April.

“We expect the CPI to remain outside of the central bank’s tolerance band of 2.5% ± 1pp at least until the end of this year and most likely also in 2022. In May, the base effect from fuel prices could push the headline figure close to 5% y/y,” Erste said in a comment on GUS' figures. 

Still, the National Bank of Poland is expected to remain on hold and keep the target rate unchanged at 0.1% until at least the end of Governor Glapinski’s term in mid-2022. 

In time, however, that policy is going to come under pressure.

“The data show that Poland is not the Eurozone or the US, which struggled to spur inflation before COVID-19. Elevated inflation has persisted in Poland since mid-2019. More structurally, high inflation is also a consequence of consumer-driven growth, with a steadily declining share of private investment in GDP,” ING said.

“The idea that the NBP can imitate global central banks like the European Central Bank and Federal Reserve is highly debatable,” ING added.

In monthly terms, the CPI grew 0.7% in April, easing 0.3pp versus March, the flash estimate also showed. Prices of food and non-alcoholic drinks expanded 1% m/m, while prices of energy remained unchanged. Fuel prices added 3.6% m/m.