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POLAND: Headline Inflation Loses Fuel, Core Seen Slightly Higher

POLAND
PolandCEEMEAEM BulletBulletEmerging Market News

Headline inflation cooled to +4.6% Y/Y in November from +5.0% prior, according to preliminary data from Statistics Poland. Sell-side analysts had widely expected inflation to slow on the back of a high comparative base in fuels (a temporary effect), but most estimates suggest that core inflation likely ticked higher (to be confirmed by the final report next month). This comes amid the ongoing debate about the optimal timing for NBP rate cuts, which have been taken off the table until March 2025, when first such discussions could potentially take place.

  • ING note that the dip in headline inflation is transitory and the rate should approach +5% Y/Y towards the end of the year, remaining on an uptrend in 1Q2025. They expect rate cuts to commence only in 2Q2025.
  • mBank call the data uninspiring, noting that the composition (which will only be revealed in the final report) may provide some interesting insights. They estimate core inflation at around +4.2% Y/Y, with a slight risk towards +4.3%.
  • Pekao play down optimism around the latest decline in headline inflation, as it was caused by a high comparative base in fuels. They expect inflation to end the year close to +5% Y/Y, averaging at +3.7% Y/Y over the whole 2024. They note that the momentum of core inflation remains elevated and is stabilising at these levels, without any signs of easing. In their view, core inflation ticked higher to around +4.2%-4.3% Y/Y.
  • The Polish Economic Institute point to the expected role of fuels, which prices in this component of the basket falling by 6% Y/Y. Meanwhile, prices in other categories rose at a stable pace (food +4.8% Y/Y). They draw attention to elevated core inflation, which might be around +4.2% Y/Y. They expect headline inflation to stabilise in December and a slight uptick in 1Q2025, with the rate marginally exceeding +5% Y/Y in January. They expect stronger declines in spring, with inflation approaching the upper end of the NBP's tolerance band in April/May, returning to the target in summer, only to be pushed outside of the tolerance band by the unfreezing of energy prices in late 2025.
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Headline inflation cooled to +4.6% Y/Y in November from +5.0% prior, according to preliminary data from Statistics Poland. Sell-side analysts had widely expected inflation to slow on the back of a high comparative base in fuels (a temporary effect), but most estimates suggest that core inflation likely ticked higher (to be confirmed by the final report next month). This comes amid the ongoing debate about the optimal timing for NBP rate cuts, which have been taken off the table until March 2025, when first such discussions could potentially take place.

  • ING note that the dip in headline inflation is transitory and the rate should approach +5% Y/Y towards the end of the year, remaining on an uptrend in 1Q2025. They expect rate cuts to commence only in 2Q2025.
  • mBank call the data uninspiring, noting that the composition (which will only be revealed in the final report) may provide some interesting insights. They estimate core inflation at around +4.2% Y/Y, with a slight risk towards +4.3%.
  • Pekao play down optimism around the latest decline in headline inflation, as it was caused by a high comparative base in fuels. They expect inflation to end the year close to +5% Y/Y, averaging at +3.7% Y/Y over the whole 2024. They note that the momentum of core inflation remains elevated and is stabilising at these levels, without any signs of easing. In their view, core inflation ticked higher to around +4.2%-4.3% Y/Y.
  • The Polish Economic Institute point to the expected role of fuels, which prices in this component of the basket falling by 6% Y/Y. Meanwhile, prices in other categories rose at a stable pace (food +4.8% Y/Y). They draw attention to elevated core inflation, which might be around +4.2% Y/Y. They expect headline inflation to stabilise in December and a slight uptick in 1Q2025, with the rate marginally exceeding +5% Y/Y in January. They expect stronger declines in spring, with inflation approaching the upper end of the NBP's tolerance band in April/May, returning to the target in summer, only to be pushed outside of the tolerance band by the unfreezing of energy prices in late 2025.