Polish core inflation eases to 8.4% y/y in September
Poland’s core inflation, which measures price growth without food and energy, came in at 8.4% y/y in September (chart), the rate easing 1.6pp versus August, the National Bank of Poland (NBP) said on October 16.
It was the sixth successive fall in core inflation’s y/y growth rate after a growth series that lasted nearly two years. Core inflation easing is in line with other price growth indicators. CPI growth eased 1.9pp to 8.2% y/y in September, the statistical office GUS said last week.
Prices growing less sharply and the ongoing economic slowdown prompted the National Bank of Poland to cut its reference interest rate by a combined 100bp to 5.75% in September and October.
The depth of the cuts – the September one arrived 75bp versus market expectations of just 25bp – prompted criticism that it had less to do with macroeconomics than it did with politics.
There was a general election in Poland on October 15 and the NBP Governor Adam Glapinski is seen as a close ally of the ruling Law and Justice (PiS) party.
Despite scooping the biggest number of votes in the election, however, PiS is set to lose power to a tripartite opposition coalition.
In m/m terms, core inflation skid 0.1%% in September, following a gain of 0.3% m/m the preceding month, the NBP data also showed.
Russia’s strong growth, driven by heavy military spending, has created growing inflationary pressure as the economy starts to overheat, the Bank of Finland institute for Emerging Economies (BOFIT) says in its weekly update.
In the most recent poll conducted by the Russian Public Opinion Research Center (VTsIOM), President Vladimir Putin's trust rating remained steady at 78.5%.
Ukraine’s leading investment bank Dragon Capital has cut its GDP forecast for Ukraine in 2024 in half to 4% y/y in anticipation of another year of war, The New Voice of Ukraine reported on December 7.
Czech industrial production increased by 1.9% year on year and by 2.8% month on month in October. The October increase follows a 5% slump registered in September, which alarmed local analysts.
Since 2018, economy has carried risk of severe balance of payments crisis. For the removal of that risk, the central bank’s net in and off-balance sheet FX position should at least turn positive.
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