Poland's consumer price index grew 1.3% y/y in March, slowing down 0.1pp against the annual growth rate seen in the preceding month, statistics office GUS announced on April 13. 

The slowdown in inflation will only entrench the Monetary Policy Council (MPC) in its dovish position. Despite predictions that demand pressures in the economy and rising costs of labour are set to push inflation close to rate setters’ red line of 2.5%, a reverse process is currently underway. March was the third consecutive month in which inflation slowed down.

Poland’s rates have sat at a record low 1.5% for over three years now and – if the current macroeconomic conditions in Poland and EU endure – they will continue unchanged for another two years, the governor of the central bank and chairman of the MPC Adam Glapinski said earlier this week.

Growth of 3.7% y/y in the food and non-alcoholic beverages segment drove CPI expansion, feeble as it was, in March. February saw prices grow 3.4% on the year in the same category. Housing costs grew 2% y/y, 0.1pp slower than in February. 

Holding price growth in March were prices in the transport segment that fell 1.9%, which compared to a retreat of 2% y/y the previous month. Prices of clothing and shoes decreased 3.7% y/y versus a fall of 4.2% y/y in February.

In monthly terms, prices fell 0.1% in March after decreasing 0.2% m/m the preceding month.