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December CPI Reading Confirmed, Analysts Expect Peak In Coming Months


Poland's statistical office confirmed the annual reading of December CPI inflation at +16.6% Y/Y, with the monthly figure revised to +0.1% M/M from the +0.2% flash. Local sell-side analysts reiterated their calls for a rebound in inflation early this year, which would be followed by a deceleration.

  • The research desk of mBank warns that we are nearing an inflation peak in the vicinity of +20% Y/Y, with risks skewed to the upside. They expect inflation to ease off thereafter but "not to the [NBP's] inflation target," due to the resilient labour market and upside risks to the growth outlook. They are increasingly sceptical about the expected depth of rate cuts and warn that premature loosening might have to be quickly reversed, with the risk of hikes still on the table even without prior cuts.
  • ING analysts see the peak of headline consumer inflation at +20% Y/Y in February. They expect the post-pandemic environment to see higher inflation and interest rates and note that the central bank is unlikely to loosen monetary policy this year amid historically elevated levels of core inflation.
  • The Polish Economic Institute says that January will likely see headline inflation in excess of +19% Y/Y, owing to the reinstatement of higher VAT on energy and fuels, transportation price hikes, as well as beginning-of-year resetting of rents, utility tariffs and recreation service prices. The Institute notes that inflation should start weakening from March and will fall below +10% Y/Y near the end of Q3.

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