Local Analysts React To Inflation Data

Based on final headline CPI figures released today, local sell-side desks estimate that Poland's core CPI inflation slowed to +12.2% Y/Y in April from a cyclical peak of +12.3% in the previous month (official data will hit the wires tomorrow).

• Pekao see core CPI inflation at +12.2% Y/Y, adding that its further decline will be slow. They stress that disinflation is visible only in the prices of goods, while services are plateauing. Pekao say that the downside surprise in food price inflation was mostly due to fruit and vegetables, while the prices of other food items rose at a decent pace (+0.9% M/M).
• mBank also estimate core CPI inflation at +12.2% Y/Y. They note that transport services pushed core inflation ~0.2pp higher and headline inflation ~0.1pp higher. A decline in food price inflation weighed on overall price growth, but it is uncertain if it will repeat in the future.
• ING point out that core inflation eased to +12.2% Y/Y from the peak of +12.3%, which is a "modest" decline relative to regional peers. The ruling party's campaign pledges worth ~1% of GDP, with more announcements coming up, mean that inflation and interest rates could stay elevated for longer.
• PKO expect the disinflationary trend to continue and predict that inflation will slow below +14.0% Y/Y in May and under +10.0% Y/Y in 4Q2023.