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Several Local Desks Maintain Their September NBP Rate Cut Calls Despite >10% Inflation


Local analysts released their snap reactions to Poland's inflation and growth data, which showed that CPI remained above the +10% Y/Y barrier in August.

  • INGwrite that inflation is not below +10% Y/Y but we are on the path towards a single-digit reading, while the economy is slowing. In their view, the MPC will cut interest rates in September. They note that final Q2 GDP data point to a weak start to 3Q23 and worsening prospects for 2H23. They revise their full-year growth forecast to +0.4% Y/Y from +1.0%.
  • mBank write that core inflation could print at +10.1-10.2% Y/Y in August, with headline at +10.1%, according to a flash reading. They do not expect a double-digit print to change the mood in the MPC and still pencil in a 25bp rate cut for next week's meeting. They recall their earlier comments on the impact of the imminent retroactive lowering of energy prices, which may affect the final reading. Turning to final Q2 GDP, they note that household consumption remains weak, investments remain strong, while inventories were the main driver of overall decline.
  • Pekao say that although inflation remained slightly above +10% Y/Y in August, this should not change much for the MPC, especially its dovish wing. They expect the MPC to lower interest rates by 25bp at the next meeting. On final Q2 GDP, they note that today's revision was likely due to the re-estimation of seasonal adjustment.
  • The Polish Economic Institute estimate that core CPI inflation fell to +10.0% Y/Y in August. They are forecasting that inflation will be lower in 2024 but will remain at elevated levels, averaging at +7.9% Y/Y. In their view, the return towards the NBP's +2.5% target will be gradual. They write that we should see the economy return to growth from 3Q2023 with a recovery in consumption amid continued support from net exports. They expect GDP growth to be around +0.6-0.7% Y/Y in 2023, accelerating to +2.2% next year.

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