Poland’s core inflation, which measures price growth without food and energy, expanded 11.5% y/y in December (chart), adding 0.1pp to the November reading, the National Bank of Poland (NBP) said on January 16.
Core inflation growth rate thus eased from an expansion of 0.4pp to 11.4% y/y in November, tracking the slowing increase of the consumer price index (CPI). The CPI came in at 16.6% in the twelfth month, easing 0.9pp versus November.
Inflation is still expected to pick up in January and February on the back of VAT rates’ on energy and food returning to their normal level after the government lowered them to shield households from the worst of rampant price growth.
From March on, however, the disinflation trend is expected to set in for good, although the average inflation in 2023 appears certain to remain in low double digits.
Easing inflation all but ends the National Bank of Poland’s tightening of monetary policy, which the NBP officially claims has only been put on hold. The central bank’s reference rate has now remained at 6.75% since September.
In m/m terms, core inflation grew 0.6% in December, easing versus a gain of 0.7% the preceding month, the NBP data also showed.