Polish PPI drops 0.1% y/y in October

Polish PPI drops 0.1% y/y in October
By bne IntelliNews November 25, 2019

Poland's producer price index (PPI) fell 0.1% y/y in October, data from statistics office GUS showed on November 22.

The reading sees PPI inflation drop below the zero line for the first time since February 2018. Meanwhile, headline inflation eased to 2.5% y/y in October, GUS said earlier this month.

Still, given fast-rising wages and the still fast, although easing, economic growth in the third quarter and in 2018 overall, inflationary trends remain modest with price growth expected to peak in early 2020 and weaken from then on, say analysts and the National Bank of Poland (NBP).

With CPI growth not expected to venture too far from Poland’s Monetary Policy Council (MPC) red line of 2.5%, interest rates in Poland look set to remain at a record-low 1.5% until 2020 or even 2021.

PPI declined 0.6% y/y in manufacturing in October, dragging down the headline figure, data showed. Other segments saw gains in the index. Prices in the water supply sector expanded 2.6% y/y. Mining and quarrying saw prices gain 1.8% in annual terms while the utility sector recorded price growth of 3.8% y/y.

Month to month, Polish PPI retreated 0.4% in October, compared to an expansion of 0.4% m/m in September.

Prices fell 0.7% m/m in mining and quarrying. PPI also slid 0.5% m/m in the manufacturing sector. Prices in the utility segment retreated 0.4% m/m while inching up 0.1% m/m in the water supply segment.

PPI expanded 1.4% y/y in January-October, GUS data also showed.

Meanwhile, prices in the construction sector grew 3.2% y/y and 0.3% m/m in October, GUS also reported on November 22. In January-October, construction prices expanded 3.6% y/y, data showed.