Polish CPI expanded 5% year on year in October, in line with the consensus, Poland’s statistical office GUS said in a flash estimate on October 30 (chart).

The reading also is 0.1pp above the official measure of September inflation, which GUS published in mid-October. Price growth in Poland is expected to hover around 5% by the end of the year, preventing a dovish pivot from the National Bank of Poland (NBP) until mid-2025, analysts say.

Just like in September, the October inflation pick-up owes largely to statistical effects from last year, according to ING. 

"The increase in the annual inflation rate was driven by food prices, especially vegetables. Annual inflation was also pushed up by fuel prices, due to a low base effect from October 2023, when gas stations offered promotional discounts,” ING said in a comment on the GUS figures.

Meanwhile, core inflation – price growth without food and energy – eased to an estimated 4.1% y/y-4.2% y/y in October, ING also said. 

Poland’s inflation outlook remains largely unchanged in the mid-term.

“In November, CPI inflation is expected to decrease due to a statistical base effect, but we anticipate it will return to a level similar to the current one by December,” PKO BP said.

“An important moment will arrive in the first quarter of 2025, as inflation should peak, depending, however, on the government’s decisions concerning energy prices. We expect a clear decline in inflation only in the third quarter of 2025, coinciding with the dissipation of the energy price freeze effect from July 2024,” PKO BP also said.

That means the National Bank of Poland (NBP) is unlikely to begin a new easing cycle before the mid-point of 2025 even though the NBP’s rate-setters do hint at a right moment coming possibly as soon as in March. 

Prices of food and non-alcoholic drinks grew 4.9% y/y in October, picking up from a gain of 4.7% y/y in September, the breakdown of the data showed.

Energy prices expanded 11.5% y/y in the tenth month, following an increase of 11.4% y/y in September. 

Fuel prices flatlined y/y in October, compared to a fall of 2% y/y the preceding month, GUS data also showed.

In month-on-month terms, the CPI added 0.3% in October after growing 0.1% m/m in September. Prices of food grew 0.7% m/m while energy prices expanded 0.3% m/m. Fuel prices, meanwhile, fell 2.2% m/m.