Polish CPI grew 2.4% year on year in April (chart), just below the consensus line of 2.5% y/y and 0.4pp above the March reading, a flash estimate from Poland’s statistical office GUS showed on April 30.

The flash reading marks the first pick-up in the annual inflation rate since March 2023. Analysts expect the CPI to keep climbing due to the end of anti-inflation regulations from the pandemic era, especially the phasing out of the zero VAT rate on foods in April and the planned doing away with the electricity price cap, from July.

“Our base scenario assumes a gradual increase in inflation to around 5% at the end of the year,” Santander Bank Polska said in a comment.

The flash reading also points to core inflation – price growth without food and energy – easing to around 4.1% y/y in April from 4.6% 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 mid-2025, analysts also say.

Prices of food and non-alcoholic drinks grew 1.9% y/y in April, the same expansion rate as in the preceding month, the breakdown of the data showed.

Energy prices fell 2.3% y/y in the fourth month, the decline rate easing 0.3pp versus March. Fuel prices slipped 1.2% y/y in April, compared to -4.5% y/y in March, GUS data also showed.

In month-on-month terms, the CPI added 1% in April. Prices of food grew 2.1% m/m. In the energy segment, prices slid 0.4% m/m while inching up 0.1% y/y in the fuel segment.