Headline CPI For May Confirmed At +2.5% Y/Y

Statistics Poland confirmed that headline inflation was +2.5% Y/Y in May, while the sequential reading was confirmed at +0.1% M/M. Official data on core inflation will be released by the central bank on June 17.

• ING write that prices continue to rise quickly in the services sector (+6.2% Y/Y), while goods price growth is relatively slow (+1.2% Y/Y). They estimate that core inflation eased to around +3.8% Y/Y in May from +4.1% in April.
• mBank see core inflation at around +3.7%-3.8% Y/Y. They note that it fell in May mostly on the back of recreation and culture amid big discounts in foreign holiday packages. They note that goods prices are stabilising, while services prices are growing. In their view, the adjustment to a higher VAT for basic food items has been temporarily mitigated by seasonal factors (which is unsustainable over the longer term). They expect headline inflation to be around +6%-7% Y/Y at the end of 2024.
  
• The Polish Economic Institute say that headline inflation will likely print within the +4.0%-4.5% Y/Y range in July, once energy price shields expire. They expect inflation to oscillate around +4.5% Y/Y in 2025.
• PKO write that goods price growth accelerated to +1.2% Y/Y in May from +1.1% in April, while services price inflation stabilised at +6.2% Y/Y.