Final CPI Revised To +6.2% Y/Y, Core Seen At +6.8%-6.9%

Statistics Poland revised December CPI to +6.2% Y/Y from the flash reading of +6.1% while leaving the sequential reading unchanged at +0.1% M/M.

• ING reaffirm their view that core CPI inflation cooled to +6.9% Y/Y in December from +7.3% prior. They reiterate that inflation will temporarily approach the target in 1Q2024 but the NBP will not change rates in the coming months due to uncertainty around the inflation path in 2H2024.
• mBank note that the final CPI print was in line with their expectations. Whether core CPI will come in at +6.8% or +6.9% Y/Y will be determined by the rounding. Its momentum has stabilised around +0.5% M/M, which mBank think is around 2-3 times too fast.
• PKO note that they had expected a revision to +6.2% Y/Y as annual food price growth and monthly energy price growth were higher than initially estimated. In their view, the revision does not alter the expectations that inflation will drop significantly towards +4.0% Y/Y already in January.
  
• The Polish Economic Institute notes that core inflation is around +6.9% Y/Y, fuelled mostly by services prices. They see a further decline in inflation going forward, towards the upper end of the target range in March. Inflation will then rebound in 2H2024. They estimate that the partial unfreezing of energy prices may boost inflation by around 2pp, while the reinstatement of the original VAT rate on food will add 0.8pp to CPI growth.