POLAND: CPI At +2.6% Seen As Last On-Target Reading Before Energy-Driven Rebound

Final data from Statistics Poland confirmed that headline inflation quickened to +2.6% Y/Y in June, with analysts expecting a further acceleration from July on the back of the reduction of energy price shields at the beginning of the month.

• ING note that the expiry of energy shields will boost headline inflation above the NBP's tolerance zone in July, while core inflation remains elevated.
• mBank's calculations suggest that the actual figure was very close to being rounded to +2.7% Y/Y, while core inflation eased to +3.7% Y/Y. They point to the divergent impact of services and goods, adding that the normalisation of services price pressures may take around two years and will be tied to wage dynamics. They expect headline inflation to reach a peak of +6%-7% Y/Y in 1H2025 before cooling eventually, which should allow the MPC to cut interest rates. 
• PKO write that inflation will break out of the NBP's +/- 1pp tolerance band around the +2.5% Y/Y target in July and may approach +5.0% this month.
• The Polish Economic Institute write that price hikes in June were contained almost exclusively to the services sector. They expect inflation to accelerate to around +4.0% Y/Y in July, with the unfreezing of energy prices boosting it by around 1.5pp. They think that the coming months will bring a slight rebound in core inflation as PPI data suggest that the production costs across most EU economies are stopping to decline.