POLAND: CPI Misses Consensus But Prints Above NBP's Target On Energy Prices

Poland's headline inflation accelerated to +4.4% Y/Y in July, according to preliminary data from the local statistics bureau, crossing above the NBP's tolerance band but missing the consensus forecast of +4.2%. On a sequential basis, inflation came in at +1.4% M/M versus +1.6% expected.

• ING reiterate that the partial withdrawal of energy price shields was responsible for hotter inflation. They expect CPI to stay within the +4.0%-5.0% Y/Y range through the remainder of the year, before peaking around +6.0% in 1Q25, with rates set to stay unchanged until then.
• mBank write that electricity and gas prices hikes added 1.2pp to headline inflation, while water prices and other factors that cannot be identified based on the flash readings added another 0.1-0.2pp. Food prices added 0.2pp to annual inflation. They note that core inflation stopped falling and ticked higher to +3.7%-3.8% Y/Y from +3.6% prior.
• Pekao note that inflation is running below the NBP's projection and market consensus, which casts doubt on expectations of a year-end inflation rate of +5% Y/Y. They currently expect CPI to print at +4.5% Y/Y in December.
• The Polish Economic Institute estimate the impact of energy price shield withdrawal at 1.4pp added to headline CPI rate, with food prices adding another 0.2pp. They note that the coming months will see stabilisation, although inflation may increase slightly further. However, they expect inflation to be above the NBP's target for another year, while core inflation may need a year and a half to return to +2.5% Y/Y.