Poland’s core inflation eases growth further to 11.1% y/y in June

Poland’s core inflation eases growth further to 11.1% y/y in June

/ bne IntelliNews

By Wojciech Kosc in Warsaw July 18, 2023

Poland’s core inflation, which measures price growth without food and energy, expanded 11.1% y/y in June (chart), the expansion rate easing 0.4pp versus May, the National Bank of Poland (NBP) said on July 17.

It was the third successive fall in core inflation’s y/y growth rate after a growth series that lasted nearly two years.

Core inflation easing is in line with other price growth indicators, with the NBP now being open about the first interest rate cut as soon as headline inflation descends below 10% y/y, which is currently expected in July or August.

The NBP's reference rate has been 6.75% since September.

Historically, core inflation would fall more or less in line with easing CPI. Analysts say, however, that past trends were very much unlike today’s when inflation is accompanied by record-low unemployment that is pushing up wages, acting as a counterforce to disinflation drivers like falling commodity prices.

CPI growth eased to 11.5% y/y in June, the statistical office GUS said last week. That is 6.9pp below the peak reading from February.

In m/m terms, core inflation grew 0.3% in June, 0.1pp below the monthly expansion rate in May, the NBP data also showed.

#macro #Poland #inflation #coreinflation #CPI #NBP #monetarypolicy #interestrates

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