Poland's producer price index (PPI) retreated 1.3% y/y in April, data from statistics office GUS showed on May 21.
The reading sees the PPI deflation deepen its fall after the index slid 0.5% y/y in March. Meanwhile, headline inflation eased 1.2pp to 3.4% y/y in March, GUS said earlier this month.
The consensus in Poland is for inflation to continue easing, as price growth will be depressed by the coronavirus (COVID-19) outbreak that is hitting demand. To pre-empt the threat of deflation and lower the cost of credit in the demand-stripped economy that Poland is fast becoming in the wake of the pandemic, the country’s Monetary Policy Council cut interest rates twice March and April to just 0.5%.
Broken down by segment, PPI fell 1.9% y/y in manufacturing in April, data showed. Factory gate prices also slid 4% in mining and quarrying. Prices in water supply expanded 5.5% y/y, while prices in the utility segment added 2.8% y/y.
Month to month, Polish PPI declined 0.6% in April, after falling a revised 0.4% m/m in March.
Prices gained 1.3% m/m in mining and quarrying while falling 0.8% m/m in manufacturing. There was a slight uptick of 0.1% m/m in the utility segment. PPI also expanded 0.2% m/m in water supply.
Meanwhile, prices in Poland’s construction sector grew 2.8% y/y and 0.2% m/m in April, GUS reported on the same day.
Price growth in the buildings construction segment eased to 3.2% y/y. In the civil engineering segment, growth also slowed down to 2.6% y/y. In the specialist work segment, prices expanded 2.5% y/y.
Monthly changes were minimal at 0.2% except for specialist work, where prices inched up 0.1%.