Polish PPI inflation accelerates further to 3.7% y/y in June

Polish PPI inflation accelerates further to 3.7% y/y in June
By bne IntelliNews July 19, 2018

Poland's producer price index (PPI) grew 3.7% y/y in June, data from statistics office GUS showed on July 18.

The outcome sees PPI inflation pick up speed after the index grew a revised 3% y/y in May. Faster PPI growth is in line with slightly stronger dynamics of headline consumer inflation, which grew 2% y/y in June, adding 0.3pp to the annual reading from May.

Given fast-rising wages and economic growth well on track to 5% y/y expansion in the second quarter – as industrial production data suggested on the same day – inflation is stubbornly moderate still, which puzzles economists.

With CPI growth lingering well below the Monetary Policy Council (MPC) red line of 2.5%, interest rates in Poland look set to remain at a record-low 1.5% until the end of 2019 at least.

PPI increased 3.7% y/y in manufacturing while growing 1.3% y/y in the water supply sector in June. Mining and quarrying saw prices advance 11.5% y/y. Once again, the utility sector was the only one to see prices fall, at 0.1% in annual terms.

Month to month, Polish PPI grew 0.3% in June, shedding 0.8pp against the monthly reading from May. The m/m growth owed to prices expanding 1.2% m/m in mining and quarrying.

Prices also grew in manufacturing, at 0.3% m/m in the sixth month. In the utility segment, PPI inched up 0.2% m/m; growth came in at the same rate in the water supply sector as well.

Throughout January-June, PPI expanded 1.4% y/y. Prices in the construction sector grew 2.8% y/y in June and 2.1% y/y in January-June, GUS also said.

Data

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