NBP sees Poland's CPI inflation below 2.5% target till end of 2015

By bne IntelliNews November 13, 2013

The National Bank of Poland (NBP) has raised its projections of inflation for the next few years, but it continues to expect CPI inflation to remain at the level below the NBP target (i.e. 2.5% y/y) throughout the projection horizon (i.e. by the end of 2015).
In NBP's March projection, the central bank expected inflation to remain below the lower band for deviations from the target until Q1 of 2015.
The November projection stipulates for average annual inflation at 1.0% in 2013 vs. 0.8% expected in the July document (compared to 3.7% reported in 2012). In 2014, the average annual CPI inflation should accelerate to 1.7% (vs. 1.2% expected in July) and further to 1.9% in 2015 (vs. 1.5% in the July document).
NBP attributes the upward revision of CPI inflation in the current projection round primarily to a rise in forecasted core inflation. According to the projection, core inflation net of food and energy prices will amount to 1.2% in 2013, 1.4% in 2014 and 1.5% in 2015.
The main reason for the rise in core inflation in the short-term projection horizon, as compared to the July projection, is the higher than projected rise in fees for municipal waste management that have been imposed by new legal provisions effective since July of 2013, it explained.
Furthermore, the central bank expects food price inflation throughout the projection horizon (i.e. by the end of 2015) and energy prices inflation in the long-term horizon to exert some positive impact.

Related Articles

EU top court rules Poland broke law by logging in ancient forest

Poland broke EU law by increasing logging in the ancient Bialowieza Forest under a pretext of fighting spruce beetle, the Court of Justice of the European Union (CJEU) ruled on April 17. The ... more

S&P raises Poland’s outlook to positive on rosy prospects of economy in 2018

Standard and Poor’s raised its outlook for Poland from stable to positive on April 13, while maintaining the country’s rating at BBB+.  The raising of the outlook is based on ... more

Finland gives final nod to construction of Nord Stream II

Finland has issued a second and final permit for the construction of the controversial Nord Stream II pipeline that is to pump gas from Russia directly to Germany via a Baltic Sea route, the Regional ... more