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Parliamentary Elections Take Focus, Final CPI On Tap

POLAND
  • Poland will hold a pivotal parliamentary election this Sunday to decide whether to grant the ruling Law and Justice (PiS) party an unprecedented third term in office. Opinion polls suggest that the contest will be tight, while the stakes are particularly high, given the opposition's pledge to hold the incumbents to account for various transgressions. While there is hope that a victory of pro-EU opposition parties could increase the odds of unlocking the frozen recovery funds, any such government would be faced by cohabitation with a hostile President, NBP Governor and Constitutional Tribunal, which could hinder effective governance. No fresh opinion polls will be published after midnight as the period of "election silence" kicks in, with first exit polls expected then the polls close at 20:00BST/21:00CEST on Sunday.
  • NBP's Ludwik Kotecki wrote in Business Insider that the "inflation tax" leads to higher budget revenue at the cost of ordinary consumers. The hawkish dissenter noted that Polish inflation has been overshooting the target since 2021 and ending the era of elevated price growth is not in sight, possibly even within the next few years.
  • Money.pl reported that fuel prices started to increase last week amid a suspicion that private suppliers and foreign companies stopped fighting for the market on the assessment that state-owned giant Orlen's alleged price suppression policy is unsustainable.
  • Final CPI readings for September will be released at 09:00BST/10:00CEST. The data will likely confirm the flash reading of +8.2% Y/Y but the details will be used by local analysts to estimate core inflation (official print is not due until Monday).
  • Poland will report August current account balance at 13:00BST/14:00CEST. Any surprises may affect the zloty's exchange rate, with surpluses seen supporting the currency in 1H2023.

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