Poland's producer price index (PPI) fell 0.3% y/y in November, data from statistics office GUS showed on December 19.

The reading sees PPI inflation drop below the zero line for a second consecutive month after an inflationary streak that began in February 2018. Meanwhile, headline inflation picked up to 2.6% y/y in November, GUS said earlier this month.

Given fast-rising wages and the still fast, although easing, economic growth in the third quarter and in 2018 overall, inflationary trends remain modest with price growth expected to peak in early 2020 and weaken from then on, say analysts and the National Bank of Poland (NBP).

With CPI growth not expected to venture too far from Poland’s Monetary Policy Council (MPC) red line of 2.5%, interest rates in Poland look set to remain at a record-low 1.5% possibly throughout 2021.

PPI declined 0.5% y/y in manufacturing in November, dragging down the headline figure, data showed. Other segments saw gains. Prices in the water supply sector expanded 2.6% y/y. Prices in mining and quarrying gained 1.2% in annual terms while the utility sector recorded price growth of 3.1% y/y.

Month to month, Polish PPI retreated 0.2% in November, compared to a fall of 0.4% m/m in October.

Prices remained unchanged m/m in mining and quarrying. PPI slid 0.2% m/m in the manufacturing sector. Prices in the utility segment retreated 0.1% m/m while inching up 0.1% m/m in the water supply segment.

PPI expanded 1.3% y/y in January-November, GUS data also showed.

Meanwhile, prices in the construction sector grew 3% y/y and 0.2% m/m in November, GUS reported on the same day. In January-November, construction prices expanded 3.5% y/y, data showed.