Czech economy grows by 2% in Q1, according to preliminary estimate
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Polish core inflation index grew 3.6% y/y in March, the National Bank of Poland (NBP) said on April 16.
The growth rate is identical to that recorded the preceding month, underpinning the still elevated CPI, growth of which eased 0.1pp to 4.6% y/y in March, statistics office GUS showed earlier in April.
Both CPI and core inflation indices are expected to ease along a steeper trajectory in the effect of the depressed demand because of the coronavirus (COVID-19) epidemic. Poland has been in lockdown since early March with most retail and restaurants closed. The tourism sector also froze.
“Core inflation will gradually converge to the inflation target [of 2.5%], due to the decrease in cost and demand pressure because of the lockdown,” Bank Millennium said in a comment.
Expecting a steep fall in inflation because of the inevitable economic crisis, Poland’s Monetary Policy Council (MPC) cut interest rates by 50 bps twice over the course of past four weeks to just 0.5%.
Poland’s GDP is currently expected to contract around 4%-5% in 2020 because of the epidemic. Most forecasts also expect a V-shaped recovery with the economy growing 4%-5% in 2021. That said, the impact of the epidemic and measures imposed to contain it is far from clear yet.
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