Poland’s core inflation, which measures price growth without food and energy, expanded 12.3% y/y in March (chart), adding 0.3pp to the February reading, the National Bank of Poland (NBP) said on April 17.
At a new all-time high, core inflation retained its growth rate diverging from the consumer price index (CPI), which eased 2.3pp to 16.1% y/y in the third month.
Headline inflation is expected to keep easing throughout 2023, although it appears certain to remain in double digits at the end of the year even - if only just.
Historically, core inflation would fall more or less in line with easing CPI. Analysts say, however, that past trends were nothing like today's when inflation is accompanied by record-low unemployment, which is conducive to wages growing fast.
Poland's gross wages grew 12.3% y/y in the fourth quarter, trailing inflation by 2.1pp.
With core inflation at the highest level in history and headline inflation easing only incrementally, the National Bank of Poland's (NBP's) reference rate is poised to remain at 6.75%, where it has been since September.
In m/m terms, core inflation grew 1.3% in March, the same expansion rate as in February reading, the NBP data also showed.