Polish CPI grew 1.9% year on year in March (chart), below the consensus line of 2.1% y/y and 1.1pp below the February reading, a flash estimate from Poland’s statistical office GUS showed on March 29.
The flash reading marks the lowest inflation level in four years. Still, analysts expect the CPI to begin a slow climb from April on due to the end of anti-inflation regulations from the pandemic era, especially the phasing out of the electricity price cap expected to kick in from July.
“[Inflation’s] trajectory largely depends on administrative decisions regarding energy prices. Still, inflation at the end of the year will increase to around 5%-6%, which is significantly lower than expected a few months ago,” PKO BP said in a comment,
The flash reading also points to core inflation – price growth without food and energy – easing to around 4.7% y/y in March, analysts say.
Both headline and core inflation provide grounds for the National Bank of Poland (NBP) to keep its reference interest rate unchanged at 5.75% until at least the third quarter of 2025, according to Santander Bank Polska.
Prices of food and non-alcoholic drinks grew 1.9% y/y in March, the breakdown of the data showed. Energy prices fell 2.6% y/y in the third month while prices slipped 4.5% y/y.
In month-on-month terms, the CPI added 0.2% in March. Prices of food fell 0.2% m/m. In the energy segment, prices slid 0.4% m/m while inching up 0.1% y/y in the fuel segment.
