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Breakeven Inflation Rate Keeps Trending Higher

POLAND
  • In the past few months, we have seen that inflation has been surprising positively in the CEE region, notably in Poland where preliminary April CPI came in at 4.3% (vs. 3.9% exp.), mostly driven by the surge in fuel prices.
  • Even though NBP Governor Glapinski recently mentioned that he was not surprised by the spike in inflation and expects inflationary pressure to ease in the second half of this year, a rising number of policymakers have started to express their concerns over inflation risks.
  • The chart below shows that Poland 2023 breakeven inflation rate has been constantly rising in the past year, currently trading at 3.63%, diverging from both NBP and sell-side estimates.
  • The blue line shows that despite the recent spike in inflation, sell-side firms still expect CPI inflation to stand below the 3-percent level in 2022 (2.9%).

Source: Bloomberg/MNI

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