Poland's producer price index (PPI) fell 1.3% year on year in February (chart), following a revised fall of 1% y/y in January, the country’s statistics office GUS said on March 20.

The PPI deflation has been ongoing since mid-2023, reflecting the still relatively low demand linked to the sluggish German economy and the domestic expansion still searching for sustained momentum, analysts say. 

The expectations are, however, for the indicator to arrive in positive territory sometime in early 2025. The index’s decline rate has been lessening since August - with only the February reading ending the run.

Prices in the most-weighted manufacturing segment declined 1.4% y/y in February after falling a revised 0.9% y/y the preceding month, the breakdown of the data showed.

Mining and quarrying prices fell 1.1% y/y in February after a revised fall of -1.8% y/y in January. Electricity, gas and utility prices fell 0.7% on the year in February after declining a revised -1.4% y/y the preceding month.

The water supply segment saw prices expand 2% y/y in the first month after a revised gain of 2.6% y/y in January.

In monthly terms, the PPI declined 0.2% after falling a revised 0.2% m/m in January.

The index added 0.3% m/m in mining and quarrying while falling 0.2% m/m in manufacturing. In the utility segment, prices fell 0.3% m/m while adding 0.2% m/m in water supply.

Meanwhile, Poland’s February CPI growth came in at 4.9% y/y, the same expansion rate as in the preceding month, GUS reported earlier this month. Headline inflation is expected at around 5% y/y in early 2025 before embarking on an incremental decline trend midway through the year or later.