Poland’s core inflation, which measures price growth without food and energy, increased 0.2pp to 3.9% y/y in August, the
Inflationary pressure in
The MPC – which seems divided over the issue, although with doves holding a majority – says that a step away from the currently ultra-lenient policy can happen as soon as Poland’s post-pandemic economic recovery is sustainable.
The MPC will review new inflation and GDP projections during a sitting in November, widely thought to be crucial for the further course of Poland’s monetary policy. With core and headline inflation expected to keep growing, “it will be quite difficult to justify a decision not to raise interest rates” in November,
Headline inflation growth came in at 5.5% y/y in August versus 5% y/y in July.
The central bank’s current inflation outlook, published in July, is 3.8%-4.4% in 2021, clearly high than the previous forecast of 2.7%-3.6%.
“We believe that the new projection will bring an even higher CPI than the one presented in July. [It] … should help build a majority in the MPC in favour of a rate hike later this year,”
“In our opinion, high CPI readings for November and December will be deciding factors here. We expect that at the end of the year, CPI inflation in
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