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POLAND: Headline Inflation Accelerates To +4.9% Y/Y, Core Also Seen Quickening

POLAND
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Preliminary data from Statistics Poland showed that headline inflation accelerated to +4.9% Y/Y in September, in line with expectations, with some desks pointing to the impact of low base effect.

  • ING point to several factors explaining why Polish CPI is not falling, contrary to other countries: (1) annual food price inflation is rising, (2) higher energy prices gradually take effect, (3) core inflation increases (they think it was +4.2% Y/Y in September vs. +3.7% prior), (4) core inflation is boosted by higher prices of education (a delayed consequence of wage hikes for teachers), (5) the comparison is against September 2023 when CPI fell by 0.4% M/M. ING believe that rate cuts will start later than abroad, in their view in 2Q2025.
  • Pekao write that the increase in inflation is no a result of a strengthening current inflationary pressure, but a result of a low base effect. They remind that September 2023 saw the introduction of free medicines for children and elderly people, as well as electricity support measures. They note that core inflation accelerated to +4.2-4.3% Y/Y, while headline will stay close to +5% Y/Y through the year-end.
  • PKO reiterate that the jump in inflation was largely driven by the September 2023 outturn, which was affected by the expansion of the free medicines programme as well as falling food prices. They expect inflation to oscillate close to +5% Y/Y until the end of this year.
  • The Polish Economic Institute attribute higher inflation outturns to the partial unfreezing of energy prices, adding that core inflation likely quickened to +4.4% Y/Y in September. They note that core inflation exceeds levels consistent with the NBP's target, while services price inflation remains stubborn. Robust wage growth will obstruct a slowdown in services prices, in their view. They expect inflation to average at +4.2-5.2% Y/Y in 2025 and only return to the target in 2026.
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Preliminary data from Statistics Poland showed that headline inflation accelerated to +4.9% Y/Y in September, in line with expectations, with some desks pointing to the impact of low base effect.

  • ING point to several factors explaining why Polish CPI is not falling, contrary to other countries: (1) annual food price inflation is rising, (2) higher energy prices gradually take effect, (3) core inflation increases (they think it was +4.2% Y/Y in September vs. +3.7% prior), (4) core inflation is boosted by higher prices of education (a delayed consequence of wage hikes for teachers), (5) the comparison is against September 2023 when CPI fell by 0.4% M/M. ING believe that rate cuts will start later than abroad, in their view in 2Q2025.
  • Pekao write that the increase in inflation is no a result of a strengthening current inflationary pressure, but a result of a low base effect. They remind that September 2023 saw the introduction of free medicines for children and elderly people, as well as electricity support measures. They note that core inflation accelerated to +4.2-4.3% Y/Y, while headline will stay close to +5% Y/Y through the year-end.
  • PKO reiterate that the jump in inflation was largely driven by the September 2023 outturn, which was affected by the expansion of the free medicines programme as well as falling food prices. They expect inflation to oscillate close to +5% Y/Y until the end of this year.
  • The Polish Economic Institute attribute higher inflation outturns to the partial unfreezing of energy prices, adding that core inflation likely quickened to +4.4% Y/Y in September. They note that core inflation exceeds levels consistent with the NBP's target, while services price inflation remains stubborn. Robust wage growth will obstruct a slowdown in services prices, in their view. They expect inflation to average at +4.2-5.2% Y/Y in 2025 and only return to the target in 2026.