Polish inflation eases to 6.5% y/y in November, flash estimate shows

Polish inflation eases to 6.5% y/y in November, flash estimate shows

/ bne IntelliNews

By Wojciech Kosc in Warsaw December 1, 2023

Polish CPI grew 6.5% y/y in November (chart), marginally below the consensus line of 6.6% y/y and 0.1pp below the October reading, a flash estimate from Poland’s statistical office GUS showed on November 30.

Analysts now expect the CPI to continue easing in the coming months but at a clearly slower rate. “In December, the CPI index should be close to today's published reading. Next year, we anticipate a continued gradual easing of inflationary pressures, although regulatory factors remain the main source of uncertainty for the inflation path in the coming year,” Bank Millennium said in a comment.

Maintaining protective measures, chiefly the zero VAT rate on basic food and frozen energy prices, will be a challenge for the new government and the withdrawal from these solutions – which will have to come eventually – will elevate inflation next year.

“Due to the resurgence of consumer demand, significant growth in the minimum wage, and increased social transfers, inflation decline will occur only incrementally,” Bank Millennium said.

Inflation might be held back to an extent by a strong zloty, which has gained nearly 7% since early October.

Food prices grew 7.2% y/y in November, easing from October’s expansion of 7.9% y/y, the breakdown of the data showed. Energy prices expanded 7.9% y/y in the eleventh month, compared to a gain of 8.3% y/y in October.

Fuel prices decreased 5.7% y/y in November after falling 14.4% y/y in October, GUS data also showed.

In m/m terms, the CPI added 0.7% in November after growing 0.2 % m/m in the tenth month.

Prices of food grew 0.8% m/m in November. In the energy segment, prices slid 0.1% m/m while growing 8.8% y/y in the fuel segment.

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