Poland’s consumer price index (CPI) rose 4.1% year on year in June (chart), picking up from 4% y/y the preceding month, data published by the national statistics office GUS on July 15 showed.

The June reading is also in line with GUS’s flash estimate published at the end of June. June was likely the last month with inflation above the permitted deviation range from the NBP target of 1.5%-3.5%, analysts say.

That will strengthen the central bank’s dovish stance, which has been underway since May, when the NBP delivered its first rate cut in two years, slashing its reference interest rate by 50 basis points to 5.25%. A reduction of 25bp followed in July. Analyst consensus is for rates to drop by 50-75bp this year and by a further 100bp in 2026.

“At its next meeting in September, the NBP may hold off on action while awaiting the 2026 draft budget,” PKO BP said in a comment.

The government, facing a new adversarial president from August – after opposition’s candidate Karol Nawrocki beat Prime Minister Donald Tusk’s favourite Rafał Trzaskowski – is expected to adopt a looser than expected fiscal policy in the run up to the general election in 2027.

“In our view, the 2026 draft budget may fail to show a fiscal deficit reduction to the extent the NBP expects, which could delay a decision to resume monetary easing. We expect the NBP to cut rates in November and continue the cycle in 2026,” PKO BP also said.

Overall, inflation’s slight increase reflects a slower decline in fuel prices and a modest acceleration in core inflation. According to estimates, core inflation rate came in at around 3.4% y/y in June from 3.3% y/y in May.

Segment-wise, prices of food and non-alcoholic beverages moved in opposite direction, gaining 4.9% y/y in June, easing 0.6pp versus May reading, GUS showed in the breakdown of June data.

Elsewhere, housing and energy prices grew 10.5% y/y in the sixth month after a gain of 10.6% y/y in May. Prices in the transport segment retreated 6% y/y in June after a fall of 7.2% y/y the preceding month.

Meanwhile, prices in recreation and culture added 6% y/y in June, following an increase of 3.4% y/y in May, GUS data also showed.