Poland’s inflation rate falls sharply to 8.2% y/y in September

Poland’s inflation rate falls sharply to 8.2% y/y in September
/ bne IntelliNews
By Wojciech Kosc in Warsaw October 2, 2023

Polish CPI grew 8.2% y/y in August (chart), below the consensus line of 8.5% y/y and 1.9pp below the July reading, a flash estimate from Poland’s statistical office GUS showed on September 29.

Inflation is expected to ease further in the remainder of the year. “In the coming months, deflation will continue to progress at a rapid pace and we will end the year with the CPI at around 7%,” PKO BP said in a comment.

“Further inflation declines will be more challenging due to the tight labour market and the likely decrease in real interest rates,” it added.

The falling inflation rate is supportive of the NBP’s plans for another interest rate cut by the end of the year. The NBP’s rate-setting body is meeting this week and there appears to be consensus for a 25bp cut that will take the central bank’s reference interest rate to 5.75%.

Food prices grew 10.3% y/y in September, easing from August’s expansion of 12.7% y/y, the breakdown of the data showed. Energy prices expanded 9.9% y/y in the ninth month, compared to a gain of 13.9% y/y in August. 

Fuel prices decreased 7% y/y in September after falling 6.1% y/y in August, GUS data also showed.

In m/m terms, the CPI slid 0.4% in September after no change m/m in the eighth month.

Prices of food fell 0.4% m/m in August. In the energy segment, prices decreased 0.8% m/m, while falling 3.1% y/y in the fuel segment.