Poland’s CPI growth came in at 2.9% year on year in September, unchanged from August, the country’s statistical office GUS said in a flash estimate on September 30.

The September flash reading is below the market consensus, which expected an expansion of 3% y/y. It has remained within the National Bank of Poland’s (NBP’s) target range of 1.5-3.5%, since July data marked the first return to the band since mid-2024.

“Fuel prices pushed year-on-year inflation higher due to a base effect, but this was offset by more favourable food prices compared with last year,” PKO BP said in a note.

Core inflation excluding food and energy held steady at 3.2% y/y, PKO BP analysts also said. 

“CPI is forecast to hover around 3.0% y/y until the end of 2025, with a deeper fall toward the 2.5% target expected in early 2026,” PKO BP also said.

The September inflation reading hints at the NBP’s delivering another interest rate reduction soon, analysts say.

“September’s stable inflation reading supports expectations for another 25bp rate cut in October. The case for an October cut is also strengthened by weaker-than-expected wage growth in the corporate sector, declining household inflation expectations, and the extension of the electricity price freeze until year-end,” Bank Millennium said.

More clarity on the medium-term outlook will come with the NBP’s new inflation and GDP growth projection, due in November, and the central bank’s opinion on next year’s draft budget.

“Lower price pressures, including on core inflation, allow for rate cuts, but with loose fiscal policy and robust economic growth, reductions should be measured. We expect the reference rate to fall to 3.50% by the end of 2026,” Bank Millennium also said.

The NBP’s reference rate is currently at 4.75% after the central bank administered three cuts, worth a combined 100bp, in May, July and September.

The September CPI reading showed prices of food and non-alcoholic drinks rose 4.2% y/y while energy prices increased 2.4% y/y, GUS said. Meanwhile, fuel costs declined 4.9% y/y.

In monthly terms, consumer prices were flat, with food down 0.5%, energy edging up 0.2% and fuel slipping 0.4%.