Inflation in Poland sank 10.8 percent year-over-year in July, compared to 11.5 percent in June, and on a month-by-month basis, prices actually fell 0.2 percent, according to Statistics Poland (GUS). However, food prices in Poland over the past 12 months have increased by 15.6 percent and energy prices by 16.7 percent, while fuel prices have fallen by 15.5 percent.
For the third month running, overall inflation has not increased.
Inflation has been coming down from the 18.4 percent peak it reached in February. According to analysts, single-digit inflation may be reached in August. They expect inflation to fall to around 7.5 percent by the end of the year.
The figures seem to vindicate the stance adopted by the Polish Central Bank and its monetary policy council, which have rejected hiking interest rates. It is now likely that the National Bank of Poland (NBP) will actually lower interest rates in September, from their current level of 6.75 percent and that there may be more reductions in the following months.
The central bank acknowledges that reaching the declared objective of reducing inflation to 2.5 percent will not be attained until the end of 2025. This means that the central it cannot reduce interest rates too quickly for fear of reigniting inflationary pressures in the economy.