Poland: Inflation ticks up in August
Inflation rose to 4.3% in August from 4.2% in July, remaining above the upper limit of the Central Bank’s inflation target range of 1.5–3.5%. The reading represented the highest inflation rate since December 2023. According to flash data, the increase was led by rising prices for food and non-alcoholic beverages and rebounding fuel costs. Meanwhile, energy price pressures softened slightly.
The trend pointed down, with annual average inflation easing to 4.3% in August from 4.8% in July.
Lastly, consumer prices rose 0.10% over the previous month in August, declining from the 1.40% rise logged in July.
Our Consensus expects inflation to average roughly a third of 2023’s level this year. That said, the reduction of energy subsidies launched in July, combined with an accommodative fiscal policy stance, is expected to intensify demand-side inflationary pressures.
Commenting on the outlook for inflation and monetary policy, ING’s Rafal Benecki and Adam Antoniak stated:
“We believe that the second half of next year should bring a clear decline in headline inflation, which should create space to start a monetary easing cycle. We expect the first 25bp interest rate cut in 2Q25, and by the end of next year, the benchmark rate could be lowered to 5-4.75%.”