Polish CPI grew 14.7% y/y in April (chart), the lowest reading since June, data from Poland’s statistical office GUS showed on May 15.

The reading, which came in line with the flash estimate published by GUS in late April, showed the inflation eased 1.4pp in comparison to March but remains sticky. The index’s decrease since February has been largely due to the high reference base from last year and falling prices in the energy sector, analysts say. 

“Inflation will keep decreasing in the coming months. Particularly favourable factors for the CPI will be the decrease in fuel prices, aided by the strengthening of the Polish zloty and global market price reductions,” Grzegorz Maliszewski, an economist with Bank Millennium, said in a comment. 

“Our base scenario assumes a decline in CPI to single-digit levels in the fourth quarter to slightly below 9% y/y in December,” the analyst added.

The April inflation reading will not change much in the monetary policy of the National Bank of Poland (NBP). 

With the CPI at around 9%-10% y/y at the end of the year, the NBP is expected to keep its reference interest rate on hold at 6.75% for the time being. Only a much deeper fall in price growth – which models currently do not show – could revise the NBP’s position.

Prices in the most-weighted food and non-alcoholic drinks segment drove the easing of the index in April, expanding 19.7% y/y in April after a gain of 24% y/y the preceding month, the breakdown of GUS data showed. 

Price growth also eased in the second most-weighted segment of housing and energy, growing 18.2% y/y in April after an increase of 19.6% y/y in March. 

Transport prices added 4.6% y/y in the third month, their growth rate picking up after a gain of 3.9% y/y in March.

In m/m terms, the CPI grew 0.7% in April, easing 0.4pp versus March, GUS data also showed.