Annual Inflation Expected In Low 4s, High Comparative Base For Energy Prices Key

Statistics Poland will release flash CPI readings for the month of January on Thursday at 09:00GMT/10:00CET. According to a Bloomberg poll of analysts, consensus looks for a slowdown in annual inflation to +4.1% Y/Y, with the sequential print expected at +0.5% M/M. This would be roughly in line with NBP Governor Adam Glapinski's comments from last week, when he noted that inflation is "around +4.0% Y/Y at the moment, maybe slightly more." The central bank expects inflation to approach (perhaps hit) the +2.5% target before rebounding later in the year.

• Note that the January and February CPI data are unusual in that flash readings are not released at the end of each respective month. The outturn for January will be revised alongside the release of February figures on March 15, when Statistics Poland will also unveil the details of the annual revision to its CPI basket. This may (but does not have to) result in a larger-than-usual correction of the preliminary estimate for January due this week.
• Alior Bank note that inflation likely eased to around +4.0% Y/Y. They write that the readings will be based on the "old" CPI basket, but will provide important information on the scale of traditional January repricing. In their view, the continued disinflation in Q1 has already been factored into the MPC's expectations, with concerns about the subsequent rebound now coming to the fore.
• Citi Handlowy estimate headline inflation at +4.1% Y/Y, pointing to the impact of a high comparative base for energy prices. They see food prices rising 1.2% M/M in January, with energy prices up 1.0% M/M and fuel prices down 1.6% M/M.
• Goldman Sachs expect inflation to print at +4.0% Y/Y amid some easing across most categories, with base effects from household energy being the largest contributor to the decline. They also see cooling pressures in food and transport fuel prices, but only expect a modest fall in core inflation to +6.6% Y/Y from +6.9%. They also expect a modest pick-up in sequential core inflation due to the January re-pricing effect - its scale will be a key takeaway in their view.
• ING estimate that headline inflation eased below +4.0% Y/Y due to a high comparative base from January 2023, when VAT on energy was restored. They expect a V-shaped inflation path this year, with rapid disinflation in 1Q2024 followed by a bounceback in 2H2024.
• Millennium Bank note that inflation may have cooled to +4.5% Y/Y, with the data set to reveal the "starting point" for inflation and the scale of the traditional seasonal repricing. They believe that the data will not materially affect expectations about the NBP interest-rate path.
  
• Pekao write that inflation may have eased to +4.0% Y/Y, thanks to a high comparative base, energy price freeze and extension of zero Vat on food. They estimate core inflation at +6.3% Y/Y.
  
• In PKO's view, inflation may have slowed to +3.8% Y/Y. They point to a relatively wide range of forecast for the upcoming data.
  
• Santander see inflation at +4.1% Y/Y, which in their view would represent a significant decline from December's +6.2%. They think energy was responsible for almost 3/4 of the expected fall in annual inflation, specifically the base effect related to the normalisation of VAT on energy at the same time last year.