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POLAND: Headline CPI Revised Lower, Local Analysts Point To Decline In Core CPI

POLAND
PolandCEEMEAEM BulletBulletEmerging Market News

Headline inflation stayed at +4.7% Y/Y in December compared with the previous month, according to revised data from Statistics Poland, even as the flash reading indicated an uptick to +4.8%. The sequential reading was revised to 0.0% M/M from +0.2%. Local analysts flagged a notable surprise in imputed core inflation (official data will only be released tomorrow afternoon), as estimates based on detailed data provided by Statistics Poland indicate its fairly decent fall.

  • mBank commented that surprisingly low food prices were coupled with a decline in core inflation, which was probably around +3.8%-3.9% Y/Y. They noted that unexpectedly low alcohol prices helped, but core categories also lost momentum.
  • ING noted that revised core inflation was +4.0% Y/Y versus +4.3% in November. They expect inflation to accelerate at the beginning of the year, but the March peak will be lower. They note that a similar downside surprise occurred in Czechia and resulted in a dovish shift in CNB communications, posing a question whether this could be the case with NBP Governor Glapinski during his Friday press conference.
  • Pekao point to a big surprise in core inflation, which they see at -0.1% M/M and +3.9% Y/Y (versus +4.2% Y/Y implied by preliminary data). They suggest that the culprit could be social care prices, which fell by 24% M/M and note that it is unclear if this might be an error.
  • PKO said that core inflation likely eased below +4.0% Y/Y from +4.3% recorded in November. Services price growth cooled to +6.6% Y/Y from +7.2% prior, while goods prices rose by 4.0% Y/Y versus +3.8% before.
  • The Polish Economic Institute estimate core inflation at around +4.0% Y/Y, which would imply the first M/M decline in more than a year. They note that core inflation still exceeds levels consistent with the NBP's target, with services prices showing continued inertia. They expect inflation to accelerate in 1Q25 on the back of higher excise taxes and other administrative fees, but add that such factors have little importance for longer-term inflationary processes. In their view, inflation will return to the target closer to 2026 and lower service price dynamics will be key in achieving this.
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Headline inflation stayed at +4.7% Y/Y in December compared with the previous month, according to revised data from Statistics Poland, even as the flash reading indicated an uptick to +4.8%. The sequential reading was revised to 0.0% M/M from +0.2%. Local analysts flagged a notable surprise in imputed core inflation (official data will only be released tomorrow afternoon), as estimates based on detailed data provided by Statistics Poland indicate its fairly decent fall.

  • mBank commented that surprisingly low food prices were coupled with a decline in core inflation, which was probably around +3.8%-3.9% Y/Y. They noted that unexpectedly low alcohol prices helped, but core categories also lost momentum.
  • ING noted that revised core inflation was +4.0% Y/Y versus +4.3% in November. They expect inflation to accelerate at the beginning of the year, but the March peak will be lower. They note that a similar downside surprise occurred in Czechia and resulted in a dovish shift in CNB communications, posing a question whether this could be the case with NBP Governor Glapinski during his Friday press conference.
  • Pekao point to a big surprise in core inflation, which they see at -0.1% M/M and +3.9% Y/Y (versus +4.2% Y/Y implied by preliminary data). They suggest that the culprit could be social care prices, which fell by 24% M/M and note that it is unclear if this might be an error.
  • PKO said that core inflation likely eased below +4.0% Y/Y from +4.3% recorded in November. Services price growth cooled to +6.6% Y/Y from +7.2% prior, while goods prices rose by 4.0% Y/Y versus +3.8% before.
  • The Polish Economic Institute estimate core inflation at around +4.0% Y/Y, which would imply the first M/M decline in more than a year. They note that core inflation still exceeds levels consistent with the NBP's target, with services prices showing continued inertia. They expect inflation to accelerate in 1Q25 on the back of higher excise taxes and other administrative fees, but add that such factors have little importance for longer-term inflationary processes. In their view, inflation will return to the target closer to 2026 and lower service price dynamics will be key in achieving this.