Inflation May Have Accelerated Further In May

Statistics Poland will release flash May CPI data on Wednesday at 09:00BST/10:00CEST, with headline expected to have accelerated to +2.8% Y/Y from +2.4% registered in April. By contrasts, sequential price growth may have slowed to +0.5% M/M from +1.1% prior, according to Bloomberg consensus.

• Millennium Bank see inflation at +2.8% Y/Y, with the acceleration driven by the dissipation of a favourable shock in fuel markets and the re-introduction of the 5% VAT rate on basic food items. In their view, sequential price growth may have slowed to +0.4% M/M from +1.1%, mostly due to food prices and core components. Per their calculations, core inflation was likely +4.0% Y/Y in May. They think that food prices are the main risk for this inflation outturn amid uncertainty around their reaction to the re-instatement of the 5% VAT rate.
• PKO flag expectations of a "further, modest" increase in CPI inflation, although it is expected to remain close to the target for now. They believe that inflation will stay within the NBP's tolerance band in 1H2024, before moving above its upper end in 2H2024, with energy price caps set to be raised from July.
• Santander expect inflation to print at +2.7% Y/Y amid a 1.0% M/M decline in fuel prices and a 0.9% M/M increase in food prices. Their analysis of online prices suggests that some of the retailers which raised prices by smaller margins in April compensated for this decision in May.