Polish core inflation picks up to 3.8% y/y in July

Polish core inflation picks up to 3.8% y/y in July

/ bne IntelliNews

By Wojciech Kosc in Warsaw August 19, 2024

Poland’s core inflation, an indicator that measures price growth without the inclusion of food and energy, picked up its growth rate to 3.8% y/y in July (chart) after an expansion of 3.6% y/y the preceding month, the National Bank of Poland (NBP) said on August 16.

The pick-up in the expansion rate ends a 15-month streak of easing core inflation growth just as other inflation indicators are also gathering momentum. CPI growth already picked up 1.6pp to 4.2% y/y in July, the statistical office GUS said earlier this month. The NBP’s inflation target is 2.5%, with a deviation of 1pp either way.

“The increase in core inflation … may be the result of increases in water tariffs in many large cities, increases in alcohol and tobacco prices, as well as rising costs in the recreation and culture sector,” PKO BP said in a comment.

Analysts expect core inflation to stabilise at around 4% y/y in the coming months as the high base effect from 2023 will be fading.

In that context, the NBP is unlikely to ease monetary policy soon. The NBP is currently expected to keep rates unchanged at 5.75% until mid-2025, with any changes coming only after there is more clarity about the inflation rate’s trajectory.

In month-on-month terms, core inflation growth picked up to 0.4% in July, following a gain of 0.2% m/m in June, the NBP data also showed.

#macro #Poland #inflation #coreinflation #CPI #NBP #monetarypolicy #interestrates

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