The annual rate of inflation is estimated to be running at 13 percent, according to the Central Office for Statistics (GUS) for May. This means that inflation, after peaking in February at 18.4 percent and falling to 14.7 percent in April, is continuing to ease. Some economists now expect interest rates to be lowered in the autumn.
GUS data shows that food price inflation is still high at 18.9 percent. Energy prices have also climbed steeply since May of last year, rising by 20.4 percent. However, fuel prices have fallen by 9.5 percent.
Analysts had expected the inflation rate to fall, but the result announced by GUS is slightly better than the forecasted 13.2 percent.
The data released on Wednesday is for the Polish Retail Price Index, but for economists, it is the base rate indicator that is the most important. This figure excludes items with the greatest price fluctuations such as food and energy. That figure in March and April remained above 12 percent, with no sign of falling.
Economists believe that only a significant fall in the base rate of inflation would send a strong enough signal to the central bank to reduce interest rates from their current level of 6.75 percent. The central bank’s inflation target is 2.5 percent, which is still a long way from its present level.