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POLAND: Consensus On Core Inflation Shifts After Last Week's Headline CPI Miss

POLAND
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Consensus has shifted towards a lower level of core inflation in February, after Statistics Poland reported headline inflation at +4.9% Y/Y (versus +5.3% expected) on the back of a revision of the CPI basket, which pushed January CPI lower to +4.9% Y/Y (versus a flash reading of +5.3%). Changes to the CPI basket reflected a return to consumption patterns that are closer to those observed before the inflationary shocks caused by the COVID-19 pandemic and war in Ukraine. For the record, Bloomberg consensus sees core inflation at +4.0% Y/Y but all of the individual entries were made before the release of headline figures last Friday. The NBP will report various measures of core inflation, including the key CPI ex-food and energy, at 13:00GMT/14:00CET. As a reminder, we will get to know statistics covering both January and February, as detailed data for the first month of the year are typically published only after the annual overhaul of the CPI basket.

  • BGK note that inflation ex-food and energy may have cooled to +3.6%-3.7% in February, which would imply a sequential change in prices to the tune of +0.3-0.4% M/M. They write that such momentum would remain inconsistent with the NBP's target.
  • Credit Agricole see core inflation at +3.9% Y/Y in January and +3.6% in February. However, in their view, core prices rose by 0.3% M/M in February, staying above its seasonal pattern for that month (+0.1%), which points to the elevated price pressures in the Polish economy. They expect core CPI momentum to moderate going forward, while remaining above seasonal patterns.
  • Goldman Sachs have now revised their core inflation estimate for January and February to +3.6% Y/Y and +3.5% respectively.
  • ING now expect to see core inflation at +3.7% Y/Y across both January and February and note that the contribution of core CPI to overall CPI increased to 57.55% this year from 54.47% in 2024. They believe that headline inflation could reach +3.0-3.5% Y/Y and return to the NBP's tolerance band as soon as in 4Q25.
  • JP Morgan see core inflation at +4.2% Y/Y (+0.56% M/M) in January and +4.0% (+0.3%-0.35% M/M) in February, which would be "quite a benign reading seasonally" while momentum "has softened recently to levels consistent with the target."
  • Millennium Bank write that inflation net of food and energy likely stayed close to its December levels in February, that is near +4.0% Y/Y.
  • Pekao note that sticky core inflation remain a source of concern and likely was around +4.0% Y/Y in February. They believe that core inflation will remain elevated through the whole 2025.
  • In PKO's view, core inflation eased to +3.9% Y/Y in February from their estimated +4.0% in January, as services prices rose by 6.6% Y/Y. However, they admit that the revisions to the CPI basket increase uncertainty around this forecast.
  • Santander now estimate that core inflation slowed from +4.0% Y/Y in December to +3.8-3.9% in January and to +3.6-3.7% in February. They also write that the peak in headline inflation expected this month may be at +4.9% Y/Y, while benign inflation figures may rekindle the debate on interest-rate cuts.
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Consensus has shifted towards a lower level of core inflation in February, after Statistics Poland reported headline inflation at +4.9% Y/Y (versus +5.3% expected) on the back of a revision of the CPI basket, which pushed January CPI lower to +4.9% Y/Y (versus a flash reading of +5.3%). Changes to the CPI basket reflected a return to consumption patterns that are closer to those observed before the inflationary shocks caused by the COVID-19 pandemic and war in Ukraine. For the record, Bloomberg consensus sees core inflation at +4.0% Y/Y but all of the individual entries were made before the release of headline figures last Friday. The NBP will report various measures of core inflation, including the key CPI ex-food and energy, at 13:00GMT/14:00CET. As a reminder, we will get to know statistics covering both January and February, as detailed data for the first month of the year are typically published only after the annual overhaul of the CPI basket.

  • BGK note that inflation ex-food and energy may have cooled to +3.6%-3.7% in February, which would imply a sequential change in prices to the tune of +0.3-0.4% M/M. They write that such momentum would remain inconsistent with the NBP's target.
  • Credit Agricole see core inflation at +3.9% Y/Y in January and +3.6% in February. However, in their view, core prices rose by 0.3% M/M in February, staying above its seasonal pattern for that month (+0.1%), which points to the elevated price pressures in the Polish economy. They expect core CPI momentum to moderate going forward, while remaining above seasonal patterns.
  • Goldman Sachs have now revised their core inflation estimate for January and February to +3.6% Y/Y and +3.5% respectively.
  • ING now expect to see core inflation at +3.7% Y/Y across both January and February and note that the contribution of core CPI to overall CPI increased to 57.55% this year from 54.47% in 2024. They believe that headline inflation could reach +3.0-3.5% Y/Y and return to the NBP's tolerance band as soon as in 4Q25.
  • JP Morgan see core inflation at +4.2% Y/Y (+0.56% M/M) in January and +4.0% (+0.3%-0.35% M/M) in February, which would be "quite a benign reading seasonally" while momentum "has softened recently to levels consistent with the target."
  • Millennium Bank write that inflation net of food and energy likely stayed close to its December levels in February, that is near +4.0% Y/Y.
  • Pekao note that sticky core inflation remain a source of concern and likely was around +4.0% Y/Y in February. They believe that core inflation will remain elevated through the whole 2025.
  • In PKO's view, core inflation eased to +3.9% Y/Y in February from their estimated +4.0% in January, as services prices rose by 6.6% Y/Y. However, they admit that the revisions to the CPI basket increase uncertainty around this forecast.
  • Santander now estimate that core inflation slowed from +4.0% Y/Y in December to +3.8-3.9% in January and to +3.6-3.7% in February. They also write that the peak in headline inflation expected this month may be at +4.9% Y/Y, while benign inflation figures may rekindle the debate on interest-rate cuts.